FIRST CHOICE
HOMES OLDHAM
LIMITED
Value for Money self-assessment 2014/15
Registered Co-operative and Community Benefit Society Number 31138R
Registered Homes & Communities Agency Number 4582
FCHO OLDHAM VALUE FOR MONEY SELF-ASSESSMENT 2014/15
INTRODUCTION
FCHO Board carried out an annual self-assessment for 2014/15 against the Homes and Communities Agency Value
for Money (VFM) Standard. In line with the VFM Standard the self-assessment identifies FCHO’s:
• Strategic Plan Objectives critical to the delivery of VFM;
• approach to and delivery of generating a return on its assets;
• costs and how they compare to similar organisations; and
• VFM gains made during the year and how these have been delivered, covering the performance of key
customer services.
The assessment also identifies FCHO’s 2015/16 targets and actions to be implemented to achieve its Strategic Plan
Objectives, inclusive of addressing any areas where service improvements are required.
FCHO recognises its role and responsibility as a Registered Provider and social business providing social housing
within Oldham. FCHO’s Strategic Plan (2015-2020) outlines its strategic objectives for the next five years. The Strategic Plan focuses resources on activities that will impact most positively in our communities and on the lives of our customers.
FCHO’s Strategic Plan analyses the business operations across four fundamental themes:
• Our Business;
• Our Homes;
• Our Communities; and
• Our People
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Value for Money self-assessment (continued)
The Strategic Plan identifies business objectives which are key to driving VFM, alongside objectives which have been
identified as bespoke priorities for our customers and communities. These Strategic Objectives are:
• To provide excellent Landlord Services putting customers at the heart of everything we do.
• To create strong, vibrant, inclusive and co-operative communities where people want to live, work and stay.
• To provide and build desirable homes which are affordable, fit for the future and well-maintained.
• To be an employer of choice, attracting and retaining the right people with the right values, skills and tools to
get things right first time.
• Support customers to further their skills and knowledge and support and create employment opportunities.
• Whilst ensuring financial viability, maximise resources to deliver the Strategic Plan Objectives, inclusive of
delivering VFM services.
• Maximise resources to deliver the Strategic Plan Objectives.
• Ensure compliance with regulatory requirements and effective risk management.
• FCHO will support the regeneration of Oldham.
The table below provides an analysis of FCHOs key business indicators
Business Indicator
2011/12
2012/13
2013/14
2014/15
Housing Stock
11,810
11,777
11,741
11,720
Turnover (£’000)
48,826
51,095
52,890
48,452
458
431
416
419
94.00%
94.00%
95.53%
97.00%
-
839.00
907.00
1,022.00
Number of employees
% of decent homes
Management costs
per property (£) *Taken
from the HCA Global
Accounts 2013/14
THE JULY 2015 BUDGET
The Chancellor’s budget statement on the 8th July 2015 announced a reduction on social housing rents of 1% each
year for four years from April 2016. In addition to this, there was also the announcement of further reductions in
welfare spend which is expected to adversely impact on the disposable income of our customer base.
The aforementioned will have a substantial negative effect on FCHO’s financial standing, requiring a significant
restructuring of our current cost base. The Board and Leadership Team are now in the process of reviewing FCHO’s
Strategic and (30 Year) Financial Plan to identify and implement action which over the coming months will address
these challenges.
This will result in a revised (30 Year) Financial Plan, which will be provided to the Homes and Communities Agency,
(HCA) by its deadline of no later than noon on 30 October 2015.
The key priority for FCHO is to ensure its financial viability is not threatened, ensuring our housing assets are
protected whilst generating sufficient resources to provide services and homes that customers value.
As the budget statement and rent changes were post the year-end balance sheet date, in accordance with Financial
Reporting Standard 21 “Events after the balance sheet date” there is an additional note (note 27) in relation to the
non-adjusting post balance sheet event. The financial statements do not reflect the possible financial consequences
of the matters described below.
STRATEGIC AND PERFORMANCE FRAMEWORK
FCHO Strategic Plan, inclusive of its Strategic Objectives is reviewed annually. FCHO recognises that VFM is integral to
achieving its Strategic Objectives and also regularly reviews its VFM Strategy to support this.
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Value for Money self-assessment (continued)
Underpinning the Strategic Plan and VFM Strategy is FCHO’s Performance Management Framework. This ensures
performance is subject to robust and regular monitoring. As part of the Framework, FCHO has identified a series
of VFM Key Performance Indicators, (KPIs). VFM is assessed on each of these indicators, including costs by taking
account of:
• Has performance materially improved or worsened from the year before; and
• How does performance compare with other similar service providers, (primarily Registered (Housing)
providers, taken from the 2013/14 Housemark benchmark comparison report for housing stock transfers with
over 7,500 properties).
FCHO uses this VFM assessment to identify where VFM improvements are required in the business and to set its
performance and financial targets for the coming year. The VFM assessment is summarised below:
Indicator
VFM Assessment
Performance improving, comparing favourably to other organisations
Progress made against targets but future improvements required
Targeted performance not achieved. Performance improvements a priority in future years
As part of its’ performance and scrutiny function, FCHO also recognises the important role customers have in
challenging service delivery whilst promoting VFM. There are two forums focussed on FCHO’s Communities and
Homes objectives. The principal function of these forums is to provide customer feedback that influences service
delivery with the aim of enhancing customer value.
FCHO also has an Independent Scrutiny Panel (ISP), consisting of a further group of customers who scrutinise service
delivery with respect to key customer services.
In our 2013/14 VFM Self-Assessment, FCHO committed to deliver further, specific VFM improvements in the coming
year as well as saving a further £3m against the Financial Plan targets. Details of the progress made against these
improvement areas can be found within the updates on each of “Our” sections within the self-assessment.
OUR BUSINESS – VFM ASSESSMENT
FCHO has a strong financial strategy which sets out how FCHO will realise VFM cashable gains. Central to this is
FCHO’s annual budget process, in which the Board approve financial targets more challenging than that assumed
in the 30 Year Financial Plan. Delivery of these targets thereby releases significant funds which are utilised to protect
FCHO’s financial viability and to provide investment opportunities for the business.
FCHO’s financial strategy and proven record in delivering savings has allowed FCHO to invest significantly in ICT
to deliver improved services and also allow FCHO to prudently protect its financial viability against the impacts of
Welfare Reform.
In 2013/14, FCHO delivered savings of £3million over and above the Financial Plan forecast and in 2014/15 has
delivered a further £3.5million of efficiencies. Of these efficiencies, £2.4 million was generated from reduced
investment works costs compared to the anticipated rates in the stock condition survey. The remaining
£0.900million of efficiencies were primarily as a result of reclaiming VAT from 2011-14 and out-performing our rent
collection and void budget targets.
In 2014/15 FCHO invested over £1.4m in the physical ICT service which involved the transfer of the existing
infrastructure and data and servers from Unity Partnership in Oldham to a new hybrid solution with out-sourced
virtual infrastructure supported by a new dedicated in house ICT team. The benefits of this to date have been:
• Implemented Mobile working in Neighbourhoods and Repairs
• Improved resiliency and increased Disaster Recovery to mitigate risks
• Implementation of a new finance system prior to April 2015
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Value for Money self-assessment (continued)
The new infrastructure will provide FCHO with the future opportunity to further develop and improve
digital access to our services with the first focus area of delivery in 2015/16 on the Allocations and Repairs
services.
The financial savings FCHO has delivered has allowed FCHO to further increase the Financial Plan bad
debt provision to mitigate the risk of the welfare reform impact and in particular the roll out of Direct
Payment. The benefits of this approach were further demonstrated by the stress testing exercise FCHO
and its Board completed for the 2015/16 Financial Plan confirming that FCHO has a number of strong
mitigations and financial responses that can be used to protect against varying degrees of financial risk.
This has only been enabled as a result of the strong financial strategy FCHO has in place achieving over
£6.5m of savings in the last two financial years with a further budget for 2015/16 targeted to deliver an
additional £3m of savings.
FCHO’s Board and Leadership Team has considered the development of new homes in future years and
recognised that in order to fund new build development there would need to be an efficiency strategy to
deliver realisable savings. Cost reductions to meet rising pension and employer National Insurance costs
have also been identified.
Therefore the FCHO Board and Leadership Team committed to deliver an Efficiency Strategy phased as a
two stage process. The first stage was achieved which delivered £0.800m of recurring savings in 2014/15.
As part of this strategy from October 2015 FCHO is closing the current pension scheme to new employees
with the new option of a defined contribution scheme. This is forecast to save FCHO a rolling £80,000 per
annum, increasing to £400,000 per annum five years after scheme implementation.
The second phase identified the delivery of a further £1.0m of recurring savings for the 2016/17 budgets.
In the light of the Chancellor’s July 2015 Budget statement, the cost reductions required are now
estimated to be significantly greater than this sum and Board and Leadership Team are currently working
on identifying and implementing the necessary level of saving options over the coming months. This
work has been supported by the fact that FCHO’s 2015/16 Budget has been set, aimed at delivering a £3.1
million (non-recurring) savings within the year.
The following table provides an analysis of “Our Business” VFM KPIs, followed by further details on some of
the key areas of work in this part of the business.
£2,721.00
£531.73
Rent Collection
What action has FCHO taken?
The review resulted in a revision of associated policies and processes to further strengthen and develop
our commercially focused income collection function. In addition to the existing pre-tenancy process
which includes a credit check, two weeks rent in advance and mandatory Direct Debits we have further
developed the areas below:
• Strengthened our affordability assessments at the pre-allocation process to include detailed review
of three months of payslips and bank statement data. The assessment include all known housing
and related costs/outgoings (including any loans etc) to ensure affordability.
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Value for Money self-assessment (continued)
• The sign up process now considers all customer debts in determining financial assessment (previously only
considered housing debts).
• Strengthened our approach to Tenancy Reviews for Probationary Tenancies with formal 9/15 month reviews
of tenancies before tenancies are progressed to five year Fixed Term tenancies ensuring a strong focus on
tenancy enforcement.
• Implemented two distinct separate tenancy agreements to support our Tenancy Review and Enforcement
approach. The first agreement is for the 12/18 month introductory tenancy which allows FCHO to
mandatorily end tenancies through the use of Section 21 legislation. The second agreement is a five year
fixed term agreement which is used when tenants have “passed” their probationary/introductory tenancy.
• Worked with the DWP to review processes and provide feedback to improve both the customer and housing
providers experience and payment processing ahead of the migration of all housing benefit customers to
Universal Credit payments.
What has this achieved?
2014/15 Rent Collection upper quartile performance at 99.88% significantly exceeded the budget target as well as
providing a £102,000 increase in cash collection compared to 2013/14.
This increase in cash collected has been delivered despite the impact of the under-occupancy charge, the
introduction of the Universal Credit pilot in Oldham and a challenging local economy.
Although the target is reduced for 2015/16 this is due to the phased introduction of Universal Credit and impacts
in reductions to the Discretionary Housing Payment Fund. FCHO believe this target will remain upper quartile for
2015/16 when compared to other housing providers collection rates at year end.
The increased income against both the 30 Year Financial Plan and budget targets for Income Collection has and
will allow FCHO to further reinvest funds to strengthen its resilience against the Welfare Reform impacts forecast to
adversely impact the Financial Plan.
Rent Loss due to Voids
In 2013/14 FCHO recognised its poor performance in relation to Rent Loss due to Voids. The year end outturn in
2013/14 was 2.53% which equated to an overall loss of income of £1.2 million for the year. In January 2014 a new
Void Improvement Plan was implemented and the year end outturn for Rent Loss due to Voids was 1.73% and
contributed to increased income of £400,000 on the previous year (Rent loss due to Voids was £806,000).
What action has FCHO taken?
FCHO continued to refine and streamline all void processes, reducing the overall time properties are void without
generating any rental income for FCHO from 63.87 days to 58.15 days, (all properties, including major works).
It is important to note that whilst the void process has been successful in reducing void numbers and average
turnaround times there has been an impact of increased average cost of void works when comparing the cost
with similar registered housing providers, (see above table) when taking account of likely inflation on the 2013/14
Housemark average cost) negating the full financial savings achieved from reducing rent loss on voids by the
increase in void works costs.
What has this achieved?
As at the end of the financial year 2014/15, voids had reduced to 125 from 304 in April 2014. This reduced number
is targeted to be maintained in 2015/16, equating to void loss of 1.1%, (upper quartile performance) generating an
additional £300,000 of rental income compared with 2014/15, (£700,000 when compared to 2013/14). In the first
quarter of 2015/16, the target for of 1.1% void loss has been delivered.
With improved performance on void numbers having been delivered in 2015/16 there will now be increased focus
on the cost of works and ensuring these are cost efficient and demonstrate value for money.
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Costs - Overheads
FCHO recognises that its overhead costs have risen. Costs are below average in comparison to similar registered
housing provider however this is an area FCHO has targeted for significant reduction within its Efficiency Strategy
(see previous page).
FCHO also compared its overall management costs (which includes the housing management and overhead costs)
with the 2013/14 HCA Global Accounts Benchmarking and whilst costs have increased slightly in 2014/15 the overall
cost per property remain below the average.
OUR HOMES – VFM ASSESSMENT
Effective Asset Management - Return on Property Assets
FCHO has an asset modelling database (FAMS) which is used to ensure that FCHO resources are aligned to achieving
the maximum value against its Strategic Plan Objectives, whilst informing on the long term sustainability of its
properties.
The asset model applies FCHO individual property data such as rents, voids, repairs and investment costs for a 30 year
period. The model uses this data to calculate a monetary value (also known as a Net Present Value or NPV) for each
property which can be aggregated by property type, estate and neighbourhood area.
FCHO has 18 Neighbourhood Plans which consider the key priorities for each Neighbourhood area and are underpinned by action plans supporting delivery of these.
The Neighbourhood plans are allocated a rating of either bronze, silver or gold according to how well they are
performing and according to the average banding across FCHO stock as a whole using the NPV as an indicator.
The first Neighbourhood area due to commence environmental works is the Coldhurst area which is in the BGreen
area. This Neighbourhood is classed as a Bronze performing area. The Neighbourhood Plan has identified the key
priorities below:• Increase demand and reduce turnover.
• Reduce fear and perception of anti-social behaviour (ASB).
• Maximise access to health services and opportunities for wellbeing.
The environmental investment works will look to target key areas such as defensible spaces and boundary
treatments to assist in reducing ASB. There will also be communal drying and planting areas to improve health and
wellbeing. As part of the approval investment process there have been targets set to reduce the financial costs
associated with void loss and repairs and also non-financial indicators including crime and to increase employment.
The tables below provide an analysis of the increase in the asset value, (NPV) expected from the Coldhurst houses
and flats as a result of the planned environmental works and other operational Neighbourhood Plan actions.
FCHO plans to commence the communal work upgrades to the Coldhurst flats in 2015/16 which will further
complement the BGreen and planned environmental works. The communal works will include new entrances,
refurbished communal internals and staircases, including new floor covering and decorating.
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Value for Money self-assessment (continued)
The following table provides an analysis of “Our Homes” VFM KPIs, followed by further details on some of the key areas
of work in this part of the business.
£363.99
BGreen Pilot Project Update
FCHO commenced work on a flagship pilot in 2013/14 – its “BGreen” project. This is an exciting innovative partnership.
Working with British Gas and Oldham Council, FCHO secured ECO grant funding estimated works value of
£10.6million. The funding was to finance external wall insulation works to properties in the area as well as providing
a catalyst to demonstrate how FCHO can improve property performance The BGreen Project was the first pilot for
the new FCHO Asset and Neighbourhood Plan framework. The BGreen project aligns with the Oldham MBC Public
Services Reform (PSR) pilot, to test how co-designing and pooling resources can deliver better value, improve the
outcomes and performance of localised community services.
The BGreen project includes 1,430 flats and houses on five estates of which 1,279 are owned by FCHO. FCHO
recognised that the low asset value for this area primarily related to a high number of void properties. The review
of this area has also identified that other housing related indicators such as fuel poverty, high levels of benefit
dependency, health and education outcomes are well below the Oldham, Greater Manchester and national averages.
What action has FCHO taken?
The majority of works were completed as at March 2015 with the scheme being handed over in July 2015. This
includes the installation of the new bio-mass boiler and external wall insulation (EWI). Both of these works have
already made a significant impact on the appearance of the BGreen area.
FCHO has taken a holistic approach to BGreen and is not purely focussed on asset NPV outcomes but other nonfinancial areas which will contribute to a sustainable community and improve fuel poverty, employment, reduce
reliance on benefits, reduce anti-social behaviour and crime. This has culminated in six key BGreen pledges which
are FCHO’s offer for the area:• BHealthy
• BHeard
• BWarm
• BSafe
• BReady
• BProud
These pledges have been developed with FCHO colleagues, customers and other key stakeholders.
BHealthy
FCHO has accessed Public Health England (PHE) funding providing a “Meal Deal” project for residents and is working
with PHE to understand the impact of the project. FCHO has also engaged the services of the Chartered Institute of
Housing to work with health and care sector partners inclusive of the Clinical Commissioning Group, Pennine Trust
and Oldham Council to pilot approaches with the aim of delivering an enhanced health/housing offer.
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Value for Money self-assessment (continued)
BHeard
FCHO recognises that customer engagement is crucial to delivering the challenging outcomes in respect of the
BGreen project and is piloting various initiatives aimed at increasing customer engagement and opportunities to get
involved in a range of social programmes across the BGreen area.
BWarm
Energy Efficiency is a key part of the BGreen pilot and FCHO is resourcing a dedicated Energy Officer two days a week
in the hub – this is to support customer provision of advice on reducing fuel costs. In addition FCHO is working with
Community Switch to support customers to move to a lower cost energy provider and to date have “switched” 77
customers in the BGreen area (anticipated average savings £45.31 per customer a year).
FCHO is also supporting and targeting single person households to switch to water meters via United Utilities which
should generate an average saving of £130 a year.
Within the BGreen area and as a direct result of the investment works there are 205 properties which have been lifted
from energy efficiency band D/E to band C which will mean more energy efficient properties therefore reducing fuel
consumption. This should save each customer on average £297 per annum.
BReady
BReady is focussed on increasing education and attainment, employment and reducing customers reliance on
welfare benefits.
To date FCHO has attracted £49,000 - Navigation to Employment funding from the Department of Work and
Pensions. This will fund a Parents Employment Project (PEP) for lone parents and this project will deliver 1-2-1
bespoke package of support to a minimum of 80 Job Centre Plus Lone Parents who will be matched to a range of
employment, skills and training opportunities. FCHO has engaged a key partner, Groundwork, to deliver this work
and this will commence in April 2015. Early indications in May are that this project is already seeing successes with
over 30 referrals.
BProud
The pledges all support FCHO’s aim to improve the community and this pledge supports this and is aimed at
customers being proud of the area where they live and the communities they are part of.
Work in 2014/15 included implementation of a Local Lettings Policy (LLP) – all void homes are now advertised as
‘Working Extra’ (for prospective customers in employment and providing appropriate housing banding).
In September 2014 FCHO Neighbourhood teams introduced an initiative “A Street a Week”, where officers visited
each of the properties on the estate, focusing on “A Street a Week” to identify and respond to issues raised by
customers. As part of this initiative there were 403 visits to properties and as at March 2015 this initiative has been
very successful, highlighting previously unidentified vulnerable customers in need of support and/or unrecorded
anti-social behaviour (ASB). Not only has this increased benefits in relation to building trust with customers, this then
ensures they feel confident that we will act when they report any future issues.
This has resulted in FCHO being able to quickly respond and action taken against 24 tenancies for untidy gardens
and fly tipping. The “A Street a Week” approach has been so successful it will be implemented across other
neighbourhoods.
BSafe
FCHO recognised issues with ASB in the BGreen area and also a general under-reporting culture. FCHO introduced a
focused ‘Report it, Get it Sorted” campaign. This has included targeting customers to ensure they are aware of FCHO’s
approach to dealing with ASB as well as providing support and reassurance to residents affected by ASB.
FCHO has seen positive impacts and already there has been almost a 50% increase in the number of ASB cases
reported. This re-enforces that the pro-active approach to anti-social behaviour and good working relationships with
external agencies is working. Customers feel confident in reporting ASB as they know FCHO are working to address
their concerns and issues and enforce tenancy conditions.
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Value for Money self-assessment (continued)
As at March 2015 a number of legal actions have been taken against customers:
• One eviction for noise and neighbour nuisance
• Three Notice to Seek Possessions issued for drug offences.
• Seven injunctions have been obtained for breach of tenancy
What has this achieved?
In addition to the outcomes provided in each of the pledge updates FCHO has also assessed the baseline 2013/14
position and the position as at March 2015 shown in the table below for the BGreen Properties:
Investment Programme Works
Since stock transfer FCHO has invested over £81 million in improving the housing stock and external environment of
its communities with in excess of £24 million to be invested over the next five years.
FCHO has an asset management strategy in place, supported by a 92% stock condition survey which was carried
out in 2011/12. This underpins the resources identified within the 30 year Financial Plan and ensures FCHO’s housing
stock meets the “Oldham Standard” stock transfer promise.
What action has FCHO taken?
In 2014/15, FCHO procured and delivered £24.1 million of works an analysis of which is provided below.
Works
Components
fitted
2014/15 Cost £
Bathroom
1,356
2,987,916
Kitchen
2,148
7,202,300
Heating & Wiring
2,656
4,544,451
Environmental works
529
199,273
Adaptations
195
1,035,675
Doors Windows etc
1,101
969,750
Other renewals
1,500
5,255,001
n/a
1,859,159
9,485
24,053,525
Fees
Total
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Value for Money self-assessment (continued)
What has this achieved?
In 2014/15 FCHO generated savings of £2.4million from this Investment Programme spend (achieved when
comparing the actual costs paid against the anticipated rates in the stock condition survey).
In 2014/15 FCHO experienced a reduction in customer satisfaction to just under 80%. This was as a direct result of key
contracts that were behind the completion dates. To ensure this was addressed FCHO worked with its contracted
partners and re-allocated its own internal resources including the Tenant Liaison Officers and this did improve
customer satisfaction - however, this only materialised in the final quarter of 2014/15. FCHO has set a target of 87%
for 2015/16 and will continue to challenge and review contractors via the formal contract monitoring process to
ensure this improved performance is delivered.
Property Development
In the first three years after transfer, FCHO’s housing stock was reduced by 120 Right to Buy sales. The number of
Right to Buys increased in 2014/15 with 59 sales bringing the total to 179 since transfer.
Since the stock transfer in 2011, FCHO has completed the development of 92 new build properties at a cost of just
over £11 million.
As a condition of the stock transfer contract with Oldham Council, FCHO is only allowed to keep a proportion of
Right to Buy sale receipts, i.e. the income it is “losing” as a result of the sale, (referred to as net income foregone). The rest of the receipt is paid over to Oldham Council.
What action has FCHO taken?
One of FCHO’s Strategic Objectives is “To provide and build desirable homes which are affordable, fit for the future
and well-maintained.”
FCHO has commenced work as part of its development strategy approach and has initially completed a strategic
review of the land in FCHO ownership to establish the viability of delivering a development programme. This
identified approximately 200 properties could be built on existing FCHO land and this was included in a report to
Board in April 2015. The Board approved work to commence on “working up” these development sites in detail and in
consultation with Oldham Council and the HCA. The result of this work is due to be reported to Board in November
2015.
FCHO is reviewing its proposed development plans in the light of the Chancellor’s July Budget statement and the
increased business risks the proposed plans will bring to FCHO in the light of reduced rent income - forecast at circa
£15 million over the next four years. Any development plans will be subject to rigorous stress testing, whilst also
taking account of the efficiency savings required as a result of the July Budget.
What has this achieved?
Since transfer, FCHO has mitigated the reduction in its property numbers due to Right to Buy sales via the completed
/ in progress development of 92 new build homes. However as a result of the increasing discounts FCHO has seen
an increase in Right to Buys.
Fuel Poverty
What action has FCHO taken?
FCHO is committed to supporting customers to reduce their fuel and affordably heat their homes and in 2014/15
FCHO has converted a further 310 properties to individual heating systems (total of 470 converted) and for the year
first year since the transfer in 2011 there has not been any financial loss for FCHO in respect of the communal heating
systems. This allowed FCHO to maintain the current fuel charge with no increase for 2014/15 to customers. The
conversion to individual heating systems has also allowed customers with individual property boilers the potential to
reduce their energy bills further by accessing energy switching options.
FCHO has also reviewed its communal gas costs and as well as the re-procurement of the gas contract saving
£20,000 per annum as a result of the improved efficient new plant.
FCHO has also trained 67 of its front line colleagues to ensure they can support customers and offer advice on
affordable warmth. FCHO has also engaged the services of Community Switch to work with FCHO customers to
switch energy providers and save them money.
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Value for Money self-assessment (continued)
What has this achieved?
As at March 2015 there have been 350 customers who have switched provider saving on average £63 per annum.
The conversion of 310 heating systems in 2014/15 has achieved investment savings of just over £1m, (compared
to the cost of investing in communal heating systems) and also further reduced on-going maintenance costs of
£40,000 per annum and additionally removed the risk of further customer heating arrears on these properties.
In 2014/15 FCHO has also re-procured its energy supply contract, delivering an 8.16% decrease in costs. In addition
FCHO installed state of the art prepayment systems and invested in increased efficient plant and equipment.
FCHO stock is currently in the top 25% SAP rating when compared to similar social housing stock nationally. FCHO
has set a target for a minimum energy efficiency rating and 95% of its housing stock is forecast to achieve this by
March 2016.
Repair and Gas Services
What action has FCHO taken?
In 2013/14 over £700,000 has been invested in a job scheduling and agile working IT solution for the in-house Repairs
and Maintenance team. The new system went live in June 2014.
Although there has been investment in ICT, FCHO has not seen the customer satisfaction increases it expected to
achieve and Repairs customer satisfaction has remained static in 2014/15 at 86.4%. This is below what FCHO aims
to achieve and following the implementation of the ICT system FCHO is fully reviewing its service processes and
reporting frameworks with the aim of maximising the ICT investment.
FCHO contacts 250 customers who have received a recent repair and their feedback indicates that the key
satisfaction factors for customers are Repairs not being completed right first time impacting customers waiting too
long for repairs to be completed. A targeted Repairs Service Improvement Plan is now in place, targeting a 3.5% increase in customer satisfaction
from 86.5% (14/15) to 90% in 15/16. Key elements of the Plan are increasing operative productivity via utilising the
performance management capability of the recent IT investment and improving the repair (job) diagnostic software
operated by FCHO’s Customer Contact Centre.
What has this achieved?
The new system allows FCHO to offer appointments for all jobs to customers, monitor productivity at an individual
operative level and drive efficiencies in the service along with reducing repair completion times for customers. This
has resulted in an increase in appointments made by over 1,000 a month and increased jobs appointed from 86.46%
in 2013/14 to 95.82% in 2014/15.
However Repairs customer satisfaction has remained static which is disappointing given the significant ICT
Investment levels. It has taken longer than FCHO anticipated to review its service processes and reporting
frameworks and understand how the data is driving the service delivery.
FCHO has an excellent record in providing gas safety servicing to all of its properties and has achieved 100%
compliance again in 2014/15.
OUR COMMUNITIES – VFM ASSESSMENT
The following table provides an analysis of “Our Communities” VFM KPIs, followed by further details on some of the
key areas of work in this part of the business.
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Value for Money self-assessment (continued)
£276.18
Landlord Services – Customer Satisfaction
One of FCHO’s keys objectives is to provide high quality landlord services achieving at least 90% customer
satisfaction with landlord services by March 2017.
FCHO has increased its management costs in 2014/15 as a result of the key priority for FCHO to increase customer
satisfaction. In addition FCHO engaged an external customer satisfaction organisation to undertake satisfaction
surveys across all areas including the repairs service. This has allowed FCHO to collect a real-time assessment of
customer satisfaction levels through feedback from a customer’s recent experience of the services and not an historic
view as in previous years.
FCHO is disappointed that Landlord customer satisfaction levels did not increase further in 2014/15. There has,
however, been a significant increase in satisfaction and FCHO remain committed to increasing performance to upper
quartile levels.
What action has FCHO taken?
The satisfaction survey data has been used to target resources and focus on the improvements that matter to
customers. To support this this FCHO has held focus groups to meet with dissatisfied customers to understand their
issues and ensure their feedback is used to allocate resources to areas prioritised by customers.
A Satisfaction Improvement Plan has been implemented and customers advised FCHO that the key areas to look at
in terms of improving satisfaction are:
• Improving the Repairs Service
• Responding to customers who have had to contact us more than once through an escalation process
• Developing further customer service skills among colleagues
• Strengthening our neighbourhood management service
What has this achieved?
FCHO’s customer satisfaction has increased by over 5% and the year-end performance was 83.21%. Although FCHO
did not achieve the overall target of 88% it is recognised that the overall satisfaction overall did improve. There were
key increases in neighbourhood satisfaction (6% increase) and also views taken into account (20% increase). However
there is further work to do in respect of Repairs service improvements and general landlord satisfaction. The target
of 88% has remained for 2015/16 and FCHO has highlighted that we need to understand the outcome of achieving
88% satisfaction in terms of resources and impact.
Local Spend
FCHO’s strategic objectives include to support the regeneration of Oldham and this is a key priority. FCHO has had
success in increasing local spend levels to support and sustain employment opportunities in Oldham. This will
continue to be a key driver in 2015/16.
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Value for Money self-assessment (continued)
FCHO faces increasing demands on resources with the introduction of Welfare Reform and Universal Credit, it is
imperative that maximum value is achieved from every pound spent. FCHO is, therefore, committed to considering
the social and economic benefits in all of its activities.
What action has FCHO taken?
FCHO is committed to being a major contributor to the wider Oldham Economy and took the decision to redefine
the local spend definition in 2014/15 and reduced the distance that defined local from 20 miles (from the head
office) to 10 miles. To support this change FCHO also changed its procurement approach for works under the Official
Journal of the European Union (OJEU) threshold limits (under £173,000) and included a requirement for quotations to
include a minimum of two local suppliers where applicable. Although FCHO amended the definition of local spend
and reduced the distance a challenging target of 50% was maintained for 2014/15.
What has this achieved?
In 2014/15 FCHO achieved local spend levels of 52.08% of all expenditure and this equates to over £27m being spent
within Oldham (this figure excludes salary costs). The Investment Programme expenditure also supports the creation
of apprenticeships. In 2015/16 FCHO is planning to further develop and understand the relationship between local
spend, employment and the regeneration of Oldham.
Community Engagement
FCHO’s Strategic Objective is to support customers to further their skills and knowledge and will support and create
employment opportunities. FCHO recognises the important role of community engagement including both FCHO
customers and Oldham residents and is committed to encouraging volunteering. Volunteering provides FCHO’s
volunteers with the benefits of increasing confidence, acquiring new skills and offers the opportunity to gain muchneeded CV enhancing skills and experience which in turn improves their employment prospects and may lead to
paid employment.
What action has FCHO taken?
FCHO has a dedicated Volunteering Co-ordinator and recruited an apprentice volunteering co-ordinator in 2014/15
(the apprentice was previously a volunteer with FCHO). The Volunteering team’s role is to recruit, support and
engage with volunteers to acquire new skills, increase their confidence and also gain CV skills and experience which
assist in leading to paid employment.
What has this achieved?
A total of 70 volunteers have supported FCHO this financial year and in total the volunteers provided over 3,500
hours of volunteering with FCHO, including time spent on training. Just under 50% of those hours have been carried
out by FCHO customers. FCHO provided 5 students from Oldham University with a 152 hour placement required for
completion of their course and provided 22 placements for unemployed residents through Job Centre Plus (JCP).
FCHO also provided 30 week-long work experience placements for business studies students from Oldham sixth
form college.
In this financial year 24 volunteers secured paid employment and 13 of the JCP placements secured paid
employment. Three apprentices have gone on to paid employment with FCHO.
OUR PEOPLE
In 2013/14 FCHO identified that the office and customer access to its premises did not meet customer and colleague
needs. In addition one of the sites was leased from Oldham Council and the lease was due to end in 2015. The Board
reviewed various options and assessed the financial implications of developing a purpose built new office that
delivered Value for Money. In January 2015 FCHO relocated two of its existing rented office sites, which housed over
260 colleagues, to a new purpose built state of the art office which incorporates both high tech modern staff and
customer facilities. The new office accommodation also provides FCHO colleagues access to new IT equipment, and
the ability to work flexibly.
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Value for Money self-assessment (continued)
The following table provides an analysis of “Our People” VFM KPIs, followed by further details on some of the key areas
of work in this part of the business.
FCHO recognises the importance of its key resource – its employees. Over 90% of FCHO’s workforce are Oldham
residents and FCHO is proud of the contribution it makes to the local economy. FCHO has further re-emphasised
its commitment to fairness in employment practices and has been recognised through its accreditation as a Living
Wage Employer.
In 2014/15 the Colleague Survey evidenced high levels of engagement and satisfaction from colleagues with 92%
of colleagues satisfied or very satisfied with their job. This has resulted in low levels of sickness absence which have
reduced further in 2014/15, equating to an overall reduction of 1.07 staff days.
FCHO has retained its Investors in People Gold status demonstrating to customers and colleagues FCHO’s
commitment to continuous improvement. In addition FCHO made its first entry in the Times Top 100 Best not for
profit employers to work for at 54th place - an outstanding achievement for the organisation.
FCHO created and sustained 19 apprentices in 2014/15.
Procurement – supporting the delivery of Value for Money
FCHO recognises the vital role that procurement has on delivering Value for Money services. Since stock transfer
FCHO has realised £1.1m procurement savings through re-tendering of existing contracts.
During 2014/15 FCHO awarded a number of contracts which have realised savings. These include the energy supply
for electricity, gas, door entry and pest control. These contracts have provided a further £228,000 of contract savings
in 2014/15 (excluding the investment programme).
FCHO – VFM SELF-ASSESSMENT CONCLUSION
As a result of the review of the actions and outcomes that FCHO has outlined in the self-assessment we believe that
FCHO complies with the current HCA VFM Standard.
Key VFM achievements in 2014/15:
Maximise Resources
• Increased Rent Collection performance of £102,000 in 2014/15 whilst maintaining upper quartile rent
collection in balancing impacts of Welfare Reform and Universal Credit
• Delivered a Void Improvement Plan which resulted in a reduction in voids reducing the void loss by £400,000
compared to 2013/14
• Savings of £3.5 million generated in 2014/15 which has allowed FCHO to invest in improved ICT and mitigate
against expected rent income reductions associated with Welfare Reform
• Delivered Phase 1 of Efficiency Strategy with £800,000 of savings included in 2015/16 budgets
Excellent Landlord
• Increased customer satisfaction with landlord services
• Maintained FCHO excellent record of delivering annual gas safety servicing to 100% of its properties
• Developed our asset modelling approach to determine investment decisions linked to financial asset (net
present) value and community regeneration targets
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Value for Money self-assessment (continued)
Strong Communities
• BGreen investment project – significant investment works including new energy efficient biomass boiler and
external wall insulation
• BGreen – six B Pledges in place with key outcomes delivered in 2014/15
• No increase in the existing communal heating charge to customers whilst also achieving a cost neutral
position
• Supporting local employment through apprenticeships, volunteering and increasing local spend within the
Oldham area
FCHO has also identified further work in 2015/16 to ensure the improvement in VFM continues. In 2015/16 FCHO
aims to achieve the priorities listed below. However in response to the Chancellor’s budget announcements on 8th
July 2015 FCHO’s key priority will be to ensure FCHO maintains financial viability underpinned by its 30 year financial
plan and to continue to provide high quality social housing services and home customers value.
• Following the success of tenancy enforcement in BGreen, this approach to be considered and adopted across
all FCHO Neighbourhoods.
• Increase customer satisfaction with landlord service and repairs services.
• FCHO has brought the Grounds Maintenance service in house as part of a restructured Estate Management
service which includes Caretaking and Grounds Maintenance Service with two distinct Caretaking teams:
Reactive and Routine Block Cleaning. The routine team are to cleanse all blocks once a week initially, and the
reactive team will respond to reports of graffiti, fly tipping etc. FCHO is also working with other stakeholders
on Environmental Planning to ensure that behaviour change is considered in preparation and evaluation of
projects.
• Maintain upper quartile rent collection in balancing impacts of Welfare Reform and Universal Credit.
• Realise savings of over £3m against the 15/16 Financial Plan targets with the savings identified from improved
rent collection performance and void loss.
• Efficiency Strategy – to continue to reduce operational net costs and drive Value for Money services.
• In response to the HCA’s revised Governance and Viability Standard FCHO is already progress a full
Governance review which includes the Strategic/ Financial Plan and Risk Management activities.
• Developing further and implementing our Strong Communities Plan with an emphasis on supporting our
customers into work and working with health and care sector providers to enhance the current health service
offer for our customers.
• Development – reviewing our plans whilst ensuring that our viability is maintained.
• The 2014/15 FCHO Value for Money Self-assessment and relevant information on FCHO’s approach to Value
for Money can be accessed via the website link below:
http://www.fcho.co.uk/main.cfm?type=valueFORMONEYATFCH
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