Value for money at
Waterloo Housing Group
Our self-assessment statement 2015
OurVfM self-assessment statement 2015
Introduction
Securing value for money is embedded in our culture
and is integral to delivering our overall corporate
strategy.We see obtaining maximum value for money
as a key component of meeting our core charitable
object to address unmet housing need and in
achieving our corporate strategy to maximise the
prudent and responsible delivery of new affordable
homes in our region.The equation is simple; the more
efficient our operations, the more new homes we can
provide. In a low grant environment we see the
maximised output of new affordable homes
combined with stable key financial ratios and good
customer satisfaction ratings as a tangible overall
manifestation of our combined value for money
achievements.
We are open about how we meet our targets and
manage our finances. Each year we publish our annual
report so that residents can see how we are
performing against agreed standards. Our financial
statements explain how we have managed our
money and demonstrate how all the surplus we earn
is always immediately reinvested into the provision of
new homes for the communities that we serve.
“on an annual basis, RPs will publish a robust selfassessment 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 organisation’s objectives;
• set out the absolute and comparative costs of
delivering specific services;
• evidence the value for money gains that have been
and will be made and how these have and will be
realised over time.”
Significance
At Waterloo we can demonstrate that we have
achieved value for money whilst meeting our key
business objectives. In the past year we have invested
to maintain the quality of our services in the long
term, with a key measure achieved – residents’ overall
satisfaction – at almost 85%. For the second successive
year we have reported a record surplus for the
Group, this year of £22.5 million and generated £23
million of surplus cash from operations (‘free cash
flow’), all of which was immediately reinvested into
building more new homes.This level of operating cash
generation is fundamental to our ability to sustain our
output of new homes at sustainable debt levels and
was a key reason that we were able to complete
more than one thousand new affordable homes in the
year, a record number for the Group and one of the
highest levels of new provision amongst all housing
associations. Free cash flow now comprises the major
part of the total subsidy required to build new homes.
Maximising the value for money derived from scarce
resources is always important for any housing
association, never more so than at the present time
of severe financial restraint and impending cash
reductions in most rents over the four year period
We always aim to run Waterloo as an efficient
business with all the rigour and discipline that involves.
Everybody here recognises that value for money is
important for the Group, not because of our
regulatory obligation to deliver good value, but simply
In addition to providing efficient, good quality services
that our customers have a right to expect from us,
we are also mindful of our wider obligation to the
general taxpayer to make full responsible use of our
considerable financial strength by providing new
homes, especially at a time when the need for such
new supply has never been greater. Our balance
sheet demonstrates that taxpayers have now invested
over £375 million in our business and we consider it
our duty to provide an acceptable annual return on
this very significant public investment.
2
from April 2016.The Homes and Communities
Agency's (HCA's) regulatory framework for social
housing requires, under the Value for Money (VfM)
standard, that:
Value for money at Waterloo Housing Group
www.waterloo.org.uk
OurVfM self-assessment statement 2015
because we know that the pursuit of value in
everything that we do will allow us to maximise the
benefit derived from our limited resources.This in
turn will benefit our customers through increased
provision of new homes, necessary investment in our
existing housing stock and enhancement to our
communities.
Our strategic approach
The Group’s purpose and key strategic objectives are
set out in the Corporate Strategy 2015-18: Delivering
our vision.We achieve our aims through pursuing our
key corporate objectives of delivering responsible
growth and resident satisfaction.We have two key
annual corporate performance targets: overall
resident satisfaction and operating margin, with our
aim being to increase both measures each year. A high
and increasing level of resident satisfaction is a good
indicator that value for money is being delivered in
the view of our customers; a high and improving
trend in operating margin indicates that the business
is being run efficiently and, as this measure is normally
associated with a high surplus, that we are generating
the resources needed to maintain our supply of new
affordable homes.The combination of high resident
satisfaction, strong performance indicators - including
qualitative measures such as SAP ratings and repairs
response times - and a high operating margin gives
the best overall indication that the Group is providing
value for money.
Having these two key targets for resident satisfaction
and financial performance means that we consider:
• our range of activities, products and markets that
may develop new income streams for us;
• how we make best use of our existing assets;
• how we are organised, so as to contain our
operating costs and maximise value for money;
• how we reduce costs without detriment to the
quality of services; and
• service quality standards (What's the deal?) that
focus our efforts on delivering a service that the
customer wants.
Board members review the efficiency and
effectiveness of operations, receiving regular reports
on key performance indicators, unit costs and value
for money activities. In approving the budget and
business plan the Board sets targets that will produce
efficiency gains and service improvements each year,
primarily via an annual increase in the operating
margin excluding sales and through seeking
reductions in underlying unit management costs. Our
financial statements, which accompany this statement,
demonstrate our track record in delivering such
continuous improvements.The Board has approved a
value for money strategy and an action plan which
sets clear targets for VfM and demonstrates how we
will achieve compliance with the housing regulator’s
VfM standard. Progress against agreed targets is
monitored by the Board on a regular basis.
Agreed value for money targets, generated with the
full involvement of staff, are translated into team and
individual performance objectives and monitored
through our performance management system, which
Value for money at Waterloo Housing Group
3
OurVfM self-assessment statement 2015
was updated and re-launched during the year. Staff are
encouraged to identify additional opportunities for
business improvement and an incentive scheme is used
to support this process. Devolved budgeting
arrangements empower those staff best placed to
secure improvements by granting them the autonomy
required to ensure the most effective action and results
for the Group.All material procurements are subject to
scrutiny with a view to using collaborative purchasing
and other opportunities to procure more efficiently.
Managers are obliged to justify recruitment to all
vacant posts, with each such occasion representing an
opportunity to reconsider how services are
organised and delivered. The Group has an on-going
programme of IT investment and standardisation
aimed at supporting this process with further
significant projects demonstrating a clear value for
money focus completed and started in the year.We
work with other housing associations to identify
suitable opportunities for collaborative procurement
with the aim of further strengthening purchasing
power and sharing best practice.
The Board has resolved not to embark upon
diversification into higher risk commercial activities
such as build for sale and market rent in response to
reduced development grant rates. Our efficient
business model and embedded cultural focus on
value for money means that, in line with our main
charitable objects, we are able to adhere to core, low
risk traditional housing association activities whilst
sustaining a significant programme of new affordable
house building with low grant per property.
Our value for money
achievements in 2014/15
Over the last year almost 85% of our residents said
that they were satisfied with us as their landlord and
we generated £23 million surplus cash from our
business through efficient operations. Our 47% social
housing lettings operating margin increased by exactly
100 basis points relative to last year, despite increased
investment in the housing stock, and is once again
amongst the very highest in the entire sector.This
4
Value for money at Waterloo Housing Group
increase in margin was equivalent to generating a
further £800,000 in resources, sufficient to subsidise
the provision of at least 30 new homes. However,
although customers have again given us a relatively
strong satisfaction rating this has declined by 3% over
the year, contrary to our target of an annual increase
in this measure.We believe that the reduction was
mostly associated with a less than satisfactory
maintenance service in the West Midlands area and
we have responded by promptly replacing the
relevant contractor, which we are confident will lead
to improved customer satisfaction ratings.
Performance of the new contractor will be closely
monitored in liaison with our local board members
for the area.
Our financial results mean that, in addition to investing
over £19.2 million in our existing housing stock
(2014: £17.5m), we were able to progress investment
of over £250 million in building new homes, with a
large pipeline of activity underway at the year end
and a record 1,052 new homes completed in the
year – a growth rate of 5.5%.The increased £23
million of surplus cash earned in the year (2014:
£19.8m) provided essential cross subsidy towards the
cost of building more than 850 new homes for
people in housing need which otherwise simply could
not be built.The full amount has already been used
for this vital, core charitable purpose and primary
strategic objective of the Group.
We continued to monitor and compare our service
against internal and external benchmarks including:
HCA published statistics, Housemark and SDS
Catalyst benchmarking data.We seek to measure or
compare our VfM on a verifiable like-for-like basis with
other organisations and we support this by
comparing our costs and other key performance
indicators against a consistent peer group of 30 other
regional or national housing association groups of
comparable size to, or larger than Waterloo Housing
Group. Currently, the main public source of
information available to benchmark our performance
is annual financial statements and regulatory
publications.The table below summarises our key
VfM measures on performance:
www.waterloo.org.uk
OurVfM self-assessment statement 2015
Waterloo Waterloo Waterloo
Housing Housing Housing
Group
Group
Group
2015
2014
2013
Management costs per home
(£)
Other
RPs(*)
2014
Comment
Our costs remain amongst the lowest decile of
the peer Group.
476
493
450
943
1,304
1,250
1,161
1,992
47
46
46
34
2,183
2,206
2,099
3,433
Current rent arrears (%)
3.6
4.2
2.6
3.9
Vacant general needs
properties (%)
0.5
< 0.1
0.4
-
The total of 72 void properties at the year end
was consistent with our target for further
reductions in void losses.
Re-let times for general needs
properties (days)
30.5
36.7
10.5
-
Improvements in re-letting times in the year
will be built upon in 2015/16 with a target
average for the year of 25 days.
Average general needs
SAP rating
72.3
72.0
71.0
-
A slightly improved rating due to planned
maintenance activity in the year.
0
0
0
-
Residents’ satisfaction with
the overall service (%)
84.9
88.0
90.0
-
Residents’ satisfaction with
repairs (%)
77.3
82.9
83.3
-
19
19
27
11
Planned & responsive
maintenance costs per
home (£)
Social housing lettings operating
margin (%)
Operating cost per home (£)
Properties failing the
Decent Homes Standard (%)
Capital commitments as a
proportion of fixed assets (%)
Our investment programme is based on
externally validated new stock condition
survey information.
Our operating margin remains amongst the
very highest in the entire sector
Progress has been made over the year in
reducing current arrears; this remains a key
improvement target for 2015/16.
The decline in customer satisfaction is
disappointing and this will be addressed
as a high priority in 2015/16.
We continue to make full use of our balance
sheet capacity for growth.
(*) The comparator RPs data comprises a simple average of information published in 2013/14 financial
statements by 30 Midlands based or national housing association groups of comparable size to, or larger
than the Group. The figures for maintenance costs per home include overheads.
Value for money at Waterloo Housing Group
5
OurVfM self-assessment statement 2015
On a number of key measures including: operating
margin, management costs, vacant properties and
resident satisfaction our performance places us well
within the top quartile. However, we are conscious
that our performance in rent collection, although still
better than the peer group average and improved
over the year, remains below our historic achievement
level and remains a key focus for further improvement
in order to improve value for money in this area of
our business.
During the year our maintenance team carried out
55,610 repairs and maintenance orders (2014: 55,739)
delivering a better than target average achievement of
agreed priority response times of 97.7% (target 97%,
2014 actual: 98.4%), thereby again providing customers
with a better than agreed level of performance for this
key service.We also improved our “right first time”
performance on repairs with 76.7% completed on this
basis.
Other key value for money actions in the year
included the following:
• our record 1,052 new home completions in the
year resulted in a 14% (234 properties) increase
on our original 2011/15 AHP contracted
programme with the HCA for 1,645 homes and
with an 8% reduction in the expected grant rate
per property, delivering an overall £3.6 million
saving for taxpayers, a saving partly achieved
through reduced procurement costs;
• we completed the fifth highest number of new
affordable homes nationally in the sector and one
of the highest proportions relative to size;
• secured additional financial commitments from key
partner organisations towards our 2015/18 AHP
programme equivalent to more than 10% of the
£52m Social Housing Grant allocation, providing
substantial leverage of resources to increase
housing supply;
• we reduced our core general needs unit
management cost by £17 (3.4%) to £476;
• delivered, for taxpayers, via self-financed investment
6
Value for money at Waterloo Housing Group
in new affordable homes, an increased financial
return of 24% on the £359 million cumulative
Social Housing Grant received in previous years;
• we met our target to reduce our weighted average
cost of capital (WACC), reducing our average cost
of debt to 4.34% (2014: 4.48%), equivalent to a
saving in interest of over £680,000;
• re-negotiated loan terms that will result in further
annual interest cost savings of up to £550,000;
• deepened our understanding of the return on our
assets by further developing our detailed net
present value analysis of the financial return derived
from every property owned in order to aid our
asset management strategy and help shape
investment and disposal plans, although further
work is still required to obtain market valuation
data on our entire portfolio;
• realised equity of £2.4 million and total sale
proceeds of £5 million, 6% above valuation, from
our strategic disposal of our small student housing
business.The equity realised from selling the 211
bedspaces of accommodation will enable us to
provide 100 new high quality family homes in
replacement that could not otherwise be built;
• secured Renewal Heat Incentive (RHI) funding
from Ofgem of £1.1 million following the
installation of 138 ground source heat pumps to
properties in Lincolnshire;
• progressed our strategy of connecting rural homes
to the gas supply network where possible, securing
additional funding of £249,000 during the year to
connect 119 homes, building on progress made in
previous years;
• further refined our individual asset appraisal model
to inform retention, disposal and tenure conversion
decisions based upon analysis of the net present
value of projected financial returns compared to
values and carrying costs;
• made encouraging progress in reducing rent losses
from voids and bad debts, with a reduction in
current tenants’ arrears to 3.6% (2014: 4.2%) and a
www.waterloo.org.uk
OurVfM self-assessment statement 2015
cash collection rate of 100.15% of rent and service
charges payable (2014: 98.34%) resulting in a
modest overall saving on our rent loss budgets.
However, we recognise that further work is
required to achieve our targeted performance level
in this area which remains a key focus for the
business in 2015/16;
• reduced average property relet times to 31 days
(2014: 37 days), thereby saving £131,000 in income
losses, but again more work is required to achieve
our target time, in this case of a 25 days relet
turnaround time;
• other action taken to boost the financial return on
assets includes:
o
conversion of an additional 227 re-lets to
affordable rent tenancies, increasing rental
income by £100,000 p.a.;
o
further developing our asset management
strategy with an on-going review of high
cost properties and again improving our
understanding of the returns from our
various rental tenures;
o
disposal of properties that are uneconomic to
retain and helping us to yield overall proceeds of
£10.6m from all property sales and an overall
surplus of £1.6m in addition to the student
housing sale;
o
delivery of our significant long term stock
re-investment programme drawn from new
comprehensive survey and condition information
which has involved survey of 46% of all our
properties.
• in 2014/15, in addition to completing a record
1,052 new homes at a lower cost than budgeted,
our experienced development and sales teams
started development of a further 825 properties,
with 189 shared ownership sales achieved,
including many homes reserved off-plan following
successful pre-completion marketing activity,
thereby improving sales and rental cash flow and
helping to reduce interest costs.
The overall financial return, in terms of operating
margin, achieved by key tenures compared to the
previous year was as follows;
Turnover
£000s
Operating
surplus
£000s
Operating
margin
2014/15
Operating
margin
2013/14
General needs
66,190
30.481
46.1%
44.4%
Shared ownership
8,245
5,810
70.5%
70.7%
Supported housing &
housing for older people
3,710
991
26.7%
35.4%
All social housing
78,774
37,270
47.3%
46.3%
461
164
35.6%
52.1%
1,751
1,087
62.1%
63.2%
Tenure
Student accommodation (*)
Market rent
(*) all student accommodation was sold in the final quarter of the year with a consequent negative impact
on operating margin but with a substantial capital gain realised.
Value for money at Waterloo Housing Group
7
OurVfM self-assessment statement 2015
Achievement of the specific targets set out in our 2014 self assessment statement
Target
Comment
Tendering of our gas servicing contract in Lincolnshire and
the East Midlands generated a £48,000 p.a. (7%) saving on
budget, also providing a more comprehensive and better
quality of service for customers within this cost saving.We
also saved an estimated £35,000 p.a. after tendering
reactive maintenance.
Expected procurement activity:
•
various key maintenance services,
including gas servicing;
•
mobile phone service provision;
•
Advanced Customer Portal (ACP);
•
email hosting services;
•
HR and payroll system;
•
purchase order processing system.
We streamlined our mobile phone service provision via a
tendering exercise resulting in cost savings of £22,000 per
year with improved service.
We began development of our Advanced Customer
Portal (ACP) which will provide customers with
‘24/7/365’ housing systems access during 2014/15 with
subsequent operating cost savings and expected
improved rent collection via functions such as on line
direct debit origination and amendment and online rent
payments.
We moved our email hosting service to Google, saving on
infrastructure costs by removing 1Tb of data and
improving service accessibility and resilience.
We successfully replaced our HR and payroll system, with
an underlying annual software licence cost saving of £7,000
and reduced associated on-going operating costs of more
than £5,000 per year.This cloud based system will improve
resilience and also reduce infrastructure costs.
We selected new purchase order processing software
that will be introduced in 2015/16 at a cost saving of
more than £10,000 per year and with improved
functionality.
8
We will again seek to progress amalgamation of the
Group’s three asset owning housing associations, but only
if acceptable terms can be negotiated with our funders. If
successful, it is expected that this strategy will result in
operating cost savings of at least £200,000 per year.
It is now evident that legal amalgamation of Group RP
subsidiaries is not a cost effective strategy at present so
we have instead focussed on increased integration of
operations to facilitate streamlined business processes
and improved efficiency regardless of legal structure, as
evidenced through our reduced unit management costs
and improved operating margin.
We will work hard to re-establish our sector leading rent
collection performance having now concluded our major
restructuring and relocation project.We also aim to
increase overall customer satisfaction.
We have made encouraging progress in improving rent
collection KPIs with current arrears, cash collection and
void properties turnaround times all improved.
However we wish to further improve on the 2014/15
performance and we also aim to improve customer
satisfaction which declined during the year, largely due
to temporary factors.
Value for money at Waterloo Housing Group
www.waterloo.org.uk
OurVfM self-assessment statement 2015
Target
Comment
We will complete the largest ever programme of housing
development in the Group’s history, with over 1,100 new
properties taken into management during 2014/15 alone
and we will prepare to deliver over 2,500 more new
affordable homes under the 2015/18 AHP with £51m
Social Housing Grant now secured for this programme.
We exceeded our agreed development targets with
1,052 completions and made substantial progress
towards our 2015/18 AHP targets with 825 further
new homes started in the year.
We will seek further to improve our efficiency and
operating margin through an expected 6% increase in new
housing stock taken into management in the year but with
operating costs growth held below existing average unit
levels.
We achieved a full 100 basis points increase in
operating margin on social housing lettings to 47.3%
(the second highest amongst our peer group) and
reduced our general needs unit management cost by
3.4% to £476 (the lowest amongst our peer group).
We will again provide taxpayers with a significant and
increased double digit annual percentage return on grant
that has been invested in our business over the last forty
years, through further self-financed investment in new
affordable homes.
Our return on grant in the year increased by 51% to
23.7% clearly demonstrating that the Group provides a
very high level of value for money on taxpayers’
investment in our business.
We will progress implementation of our ACP intended to
improve access to services on a “24/7/365” basis and with
materially reduced operating costs to follow.We will also
use this enhanced facility to improve our knowledge of
customers, their needs, and their perception of our service
quality.
The ACP software developer was appointed and the
bespoke software system was developed to successful
trial of a beta version during the year with full rollout to
customers to take place during 2015/16.
Value for money at Waterloo Housing Group
9
OurVfM self-assessment statement 2015
10
Target
Comment
Close working relationships with our key local authority
partners will continue in order to deliver our £51 million
SHG allocation under the 2015/18 AHP and to stretch the
grant resources available with leverage of further financial
support.We will make full prudent use of our balance
sheet capacity to deliver this large organic growth
programme.
We built upon our strong relationship with a number
of key partner local authorities and successfully secured
additional public capital subsidy of more than £5 million
towards the 2015/18 AHP (equivalent to 10% of the
SHG allocated).We also secured additional New
Homes Bonus allocations of over £100,000 per year.
We continue to demonstrate full use of our balance
sheet for the provision of new affordable homes, with
capital commitments as a proportion of housing
property assets maintained at 19% (2014: 19%)
Work on our asset management strategy and action plan
will be advanced to further refine our knowledge of asset
performance in order to better target investment and sales
strategies.
We updated our asset database with additional details
of asset performance, stock condition and forward
maintenance, using this to better inform disposal
decisions taken in the year, although we did not make
as much progress as intended on obtaining
comprehensive market value data for all stock, which
remains an objective for 2015/16.
We will further develop our benchmarking of costs and
service performance.
We developed our benchmarking, particularly to obtain
comparative data of return on grant offered by our 30
major regional and national RPs used as a peer group.
We consider return on grant to be one of the most
important measures of value for money provided by RPs.
We remain conscious of the potential for Group
enlargement, via acquisition and merger, to reduce unit
operating costs, as has been powerfully demonstrated by
the growth path we have followed in recent years.We will
look to pursue such strategies when high quality services
can be sustained at lower cost and there is good strategic,
geographic and cultural fit.
We remained open to considering M&A activity and
see sector consolidation as an inevitable outcome of
the rent reductions to take place over the 2016/17 to
2019/20 period.
Value for money at Waterloo Housing Group
www.waterloo.org.uk
OurVfM self-assessment statement 2015
Value for money for taxpayers
Government support over the years in form of
capital grants to build new affordable homes,
accounts, to a material degree, for the significant
balance sheet strength that the Group enjoys. In the
last 40 years we have received over £375 million in
grants from central government and local
authorities.We consider it important for the Group
to demonstrate value for money is provided for
taxpayers by drawing on this balance sheet strength
to meet our key charitable object of providing even
more affordable new homes.
We have set ourselves the target of delivering, as
evidenced through our annual financial statements, a
return of at least 6% per year on this grant
investment and actually achieved almost 24%, an
increase of 50% in the year.We will demonstrate the
return by making further self-financed investment in
new affordable housing only, net of any additional
grant received. Our achievement in the year
compared to the previous two years was as follows:
2014/15
£000s
2013/14
£000s
2012/13
£000s
A) Social Housing Grant at 1 April
358,938
342,265
326,376
(B) Additions to housing properties
106,767
74,805
65,210
(C) less: capitalised components
(3,454)
(3,136)
(2,867)
(D) less: Social Housing Grant
(18,184)
(17,849)
(16,016)
(E) Net self-financed additions
85,129
53,820
46,327
(F) Return on grant (E/A)
23.7%
15.7%
14.2%
The average return on grant measured over three years was 18.0% p.a.
Value for money at Waterloo Housing Group
11
OurVfM self-assessment statement 2015
Last year the Group’s 15.7% return on grant was the
fourth highest amongst our peer group of thirty RP
groups.The return achieved in 2014/15 was
substantially above the highest return of the peer
group based on last year’s financial statements.
Understanding the return on assets
Our asset management strategy was further
developed during the year; it sets out our approach
to ensuring that our properties meet our long term
requirements in terms of location, condition, tenure
mix, and rate of return on investment. In assessing the
relative financial performance of our assets we have
considered the contribution and operating margin for
each of our asset categories. For example, on our
social housing assets we achieved an increased
operating surplus of more than £37 million (2013/14:
£34 million), equivalent to an operating margin of
47%, well above the 27% sector average.
Using further updated stock condition information
we have now conducted in depth analysis of all
properties to establish by operating area and at
individual property level: the gross return on net
book value, gross return on estimated open market
value, net present value of forecast cash flows and
affordable housing replacement ratio – i.e. the
number of new homes that could be financed from
any net sales proceeds if a property is sold.We will
use this information to inform investment and
disposal strategies in future years.With over £600m
equity in our properties, which is not recorded in
our balance sheet, we are conscious of the need to
examine how we can selectively liberate value to
increase the overall supply of affordable housing.
The graph below demonstrates the distribution of
net present value (NPV) scores by property size for
our key tenure: general needs, based upon our
current weighted average cost of capital:
The operating margin across the main tenure groups
is set out above.
General needs properties: distribution of NPV scores (nos.)
at group weighted average cost of capital
1,400
3,000
1,200
2,500
1,000
2,000
800
1,500
600
1,000
400
500
200
0
0
Below £30k - £35k - £40k - £45k - £50k - £55k - £60k - £65k - £70k - £75k - £80k - £86k - Above
£30k £35k £40k £45k £50k £55k £60k £65k £70k £75k £80k £85k £90k £90k
Bedsit
1-bed
4-bed
Overall (Right scale)
2-bed
3-bed
5-bed
12
Value for money at Waterloo Housing Group
www.waterloo.org.uk
OurVfM self-assessment statement 2015
Return on assets and disposals strategy
• we use our analysis of the return on our assets to
help direct investment programmes, asset disposal
strategies, and identify tenure conversion
opportunities.The analysis will be updated regularly
and, having updated stock condition information, we
plan to enhance open market valuation information
and other asset performance data to provide for
progressively more fine grained analysis of asset
performance in order further to improve decision
making.
• during the year we further refined our bespoke
individual asset appraisal model to inform discrete
retention, disposal and tenure conversion decisions
based upon analysis of the net present value of
projected financial returns compared to market
values and carrying costs. Using our model we
identified 11 social housing properties that should
be disposed of, realising additional net cash flow of
£0.66 million and a surplus of £0.3 million.We
also disposed of 211 student housing properties
yielding a cash receipt of £5 million and a profit
of £2.4 million.
• we make maximum use of our asset base to provide
new homes, with our capital commitments at the
year-end representing 19% of the cost of our total
housing properties, one of the highest proportions
in the sector and almost twice the average level of
our peer group.
Conversions to affordable rent tenancies
• we have improved our return on assets by
converting a further 227 social rented tenancies to
affordable rent on re-letting, generating additional
net income of £100,000 per year.
Property sales service
• we have strengthened our sales expertise, with 189
sales achieved in the year (2014:146), sales values
maximised through increasingly sophisticated
marketing, and more properties sold ‘off plan’
thereby maximising cash flow and helping to reduce
debt service costs. Our effective marketing activity
helped us achieve sales values in excess of budget,
further improving our return on assets and the
viability of development schemes.
Social value added
Our value for money objective means that we also seek
to provide enhanced services for customers at current
or reduced costs.
As reflected in our Strategic Plan, the Group is
committed to working with customers and
communities to develop their full potential.The wide
range of work undertaken by the Group and
promoted in the year included:
Encouraging digital inclusion - work to address digital
exclusion to support the national Digital by Default
campaign and ensure that customers are fully prepared
for the advent of Universal Credit.We opened ‘Digi
lounges’ and ‘Digi Access Points’ at six new locations
across our area, which, combined with training and
support, served to enhance customers’ IT skills and
confidence in addition to providing access to internet
facilities, enabling numerous customers to successfully
access new employment opportunities.
Working with local schools and communities promoting good community relations and affordable
housing and related events such as summer play
activities for children.Activities promoted included
support of gardening initiatives in schools and
communities, such as vegetable growing by children, also
linked to NHS healthy eating campaigns.
Work to support older people - working with local
organisations and older people to support the
vulnerable, including those affected by dementia and
mental health issues.
Our long-standing Steps project with Birmingham and
Solihull Mental Health FoundationTrust to help older
Value for money at Waterloo Housing Group
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OurVfM self-assessment statement 2015
people with mental health issues was shortlisted for a
national award in 2014. EROSH, the national
consortium of older people’s housing and support
providers, selected the Steps project as one of 11
finalists in its 2014 Innovation and Good Practice
Awards.The awards celebrate the best providers
working creatively to provide quality housing and
support to meet the needs of our ageing population.
Our Steps project began eight years ago at Waterloo’s
sheltered schemes in Birmingham and Solihull, with
therapy groups for older people with mental health
distress. Our partnership has continued to develop to
provide a range of opportunities for both older
residents in the local community and our tenants.
Work to promote community cohesion – working
within communities to engage with and support our
tenants. We have a number of examples where we
have worked with local communities to develop Good
Neighbourhood Agreements, carry out estate
walkabouts and organise community clear up days.An
example of this work is at Monarch Park, Cannock,
where we worked closely with the local community
and our partners at Cannock Chase District Council in
the year to set up a youth group to fully engage with
young people in the area.This has proved very
successful and served to enhance the quality of life for
many in the local community.
Supporting apprenticeships – working with our key
contractors, supporting apprenticeships in construction
and maintenance, and providing apprenticeships with
the Group. The Group has a long history of investing in
local communities by supporting apprenticeships, both
directly employed by us or by our construction
partners when developing our new homes.We created
20 internal Group apprenticeship places and have seen
a high retention rate - out of 20 apprenticeships, 18
remain in place successfully developing skills which have
equipped them to move into permanent roles with the
Group.
homes we are developing. For example, our site at
Baddesley Ensor in North Warwickshire where a
trainee quantity surveyor and apprentice plasterers are
employed; at Church Road North in Skegness where
trainee electricians and joiners are working; North
Thoresby where thirteen trainee scaffolders, plumbers
and site engineers are helping us develop new homes,
and at Fielding Meadow, Ratby, where there is a
plumbing apprenticeship. In many cases this work is
undertaken in partnership with courses run by local
colleges.
Working to support specialist providers - work to
support other specialist providers working with
homeless people or those with a disability including
organisations such as St Basils, working with vulnerable
young people, and One Roof, Leicester, working with a
consortium of independent faith, community and
voluntary sector organisations supporting the homeless,
destitute and vulnerably housed in Leicester.
Addressing financial exclusion and poverty –
supporting our tenants by working with organisations
such as the Money Advice Service and credit unions to
address issues of financial inclusion. Specific examples of
projects progressed in the year include our work with
Birmingham Settlement.We have developed a
relationship with this organisation in the West Midlands
to offer services to our customers such as debt advice
and assistance with accessing benefits and services.
Although based in the West Midlands, Birmingham
Settlement offer their services to all our customers
across the different areas we operate in.We also
progressed work with the Citizens Advice Bureau
(CAB) to provide similar support to customers in the
Lincolnshire area.A further initiative progressed was our
work with National Grid and local authorities to
eradicate fuel poverty, particularly for those
encountering payment difficulties with utilities.
We also have a number of examples where apprentices
are currently employed by contractors working on
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Value for money at Waterloo Housing Group
www.waterloo.org.uk
OurVfM self-assessment statement 2015
Future value for money plans
Our value for money objectives in 2015/16 include the
following:
• an increase in our overall customer satisfaction rating
and operating margin excluding sales;
• to further develop our community initiatives,
particularly to enhance the quality of life of our most
vulnerable customers;
• our work to improve overall efficiency and service
quality will continue, with the main focus in 2015/16
on preparation for the full roll out of Universal
Credit, delivery of our substantial pipeline of
development activity under the 2015/18 AHP,
with more than 500 more new property
completions expected in the year. Our capital
commitments as a proportion of the gross cost of
housing properties continues to demonstrate the
extent to which our asset base has been fully
employed to maximise the provision of new
affordable homes;
• a targeted increase in shared ownership staircasing
sales to generate 100 transactions and release an
additional £2 million net proceeds for re-investment;
• we aim to reduce the average cost of responsive
repairs by 20% to below £100 during the year
following re-tendering of contracts in the year, whilst
sustaining our current 85% level of “right first time”
repairs;
• secure a further £260,000 of National Grid funding
to connect an additional 134 homes to the gas
network;
• we will again seek to improve our efficiency and
operating margin through a continuing downward
pressure on overall operating costs, with the specific
objective of saving at least £300,000 in general
overhead costs in the year;
• we aim to further improve our rent collection
performance following a period of consolidation
after major business change in 2013/14, including a
targeted 101% cash collection rate and reduction in
void losses with an average 25 days re-let time.We
have set a target of encouraging 35% of customers
to pay rent via direct debit (from the present level
of 25%);
• we will further strengthen knowledge of our assets
by working with advisors to obtain open market
values for our properties where we do not already
hold this information to update our comprehensive
asset database; this information will assist us to
identify additional opportunities for improving the
overall return on assets;
• we will convert an additional 200 properties to the
affordable rent tenancy to generate additional rent
income of £100,000 in a full year;
Value for money at Waterloo Housing Group
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OurVfM self-assessment statement 2015
• we will again provide taxpayers with a significant
double digit annual percentage return on grant that
has been invested in our business over the last forty
years, through further self-financed investment in
new affordable homes.We regard this measure as a
leading indicator as to how the Group provides
value for money in delivering its key strategic
objective and principal charitable objects;
• we will fully introduce our advanced customer
portal designed to provide a “24/7/365” improved
on line access to our services and with phased
reductions in operating costs to follow.We will also
use this enhanced facility to improve our knowledge
of customers, their needs and their perception of
our service quality;
• by introducing Workflow technology we will
improve customer service and streamline business
processes across the Group, improving internal
liaison between teams and increasing visibility in the
various stages of task management, thereby reducing
management dependency and enabling a further
phase of operating cost reduction;
• we will seek to further reduce our weighted average
cost of capital, by at least 20 basis points, thereby
saving £1 million per year in interest costs;
• we will seek to reduce staff sickness levels to 2% and
labour turnover to 8%;
• we will seek to enter into new strategic
partnerships, including mergers, where this can
clearly improve overall value for money.
We will account for our performance in achieving these
new targets in our 2016Value for Money self
assessment statement.
1700 Solihull Parkway,
Birmingham Business Park,
Solihull, B37 7YD
www.waterloo.org.uk
16
Value for money at Waterloo Housing Group
www.waterloo.org.uk