Value for Money Statement
Financial Year ending December 2013
Value for Money – Year ending December 2013
Since the launch of our Value for Money (VFM) Strategy by our Board in May 2012,
considerable progress has been made on delivering against many of the actions we are
committed to. For example, we have implemented major change and re-structured our
sheltered housing services, while continuing with excellent performance. Also, by
maintaining a healthy financial position we have been able to increase investment in our
homes and services and increase stock in management by acquiring over 450 homes from
Riverside and Swan housing groups.
Our continued membership of EP Ltd, (formally know as Eastern Procurement) helps us to
get the very best prices for our asset improvement programme. We continue to carry out all
our new homes development through Iceni homes Ltd, our joint venture company with Colne
and Hundred Houses. This offers a much lower cost of fees (averaging 3.%) for
development and has the added advantage of any profits being returned to us through gift
aid.
These are just some of the efficiencies that we have all gained from in the last year and
some will be explored in more detail through the various case studies in this, our first, Value
for Money statement. As you would expect, the Board will continue to push hard to meet the
challenges set by our VFM strategy and intends to meet and even exceed the target of 4%
savings against turnover by May 2015.
The understanding of assets and their return is vital to the VFM process. Suffolk Housing
has engaged Ark Consultancy to deliver a comprehensive asset management study which
will report in April 2014 on comparative contributions from stock taking into account costs,
geography, quality and overall financial yield. This will give the Board a unique insight into
the cost and quality of our stock and inform our disposals and retention programme from
2015. Disposals are an essential financial contributor to new build housing and the early
outcomes from this Ark Consultancy study will be fed into our HCA bid for new homes
funding for the 2015-2018 affordable homes programme.
This ‘Value for Money’ section of the financial statements is split into 3 parts. Our strategy
and arrangements for delivery of VFM, a number of case studies highlighting specific
achievements and finally a summary of our ‘Housemark’ cost and customer outcomes
benchmark position in the regional market for both 2012 and 2013.
What our VFM Strategy says
Value for money is the relationship between the cost of our service, its efficiency and its
effectiveness. In December 2012, our Chief Executive, described to our staff team at their
annual staff conference the link between this and our three year business plan and how it is
essential that this was part of everything we do.
In practice this means one of three things;



doing the same for less
doing more with the same
achieving more for less
To be effective, VFM needs to be a continuous process; there is no beginning or end to it. At
Suffolk Housing, embedding our attitude to value for money and aligning it with our values
we see as key to our success. Our Values already inform the way we recruit and reward our
staff, also form the basis of all our plans and have an intrinsic link with our approach to Value
for Money. So, for example in our fourth value we are committed to “working with efficiency
and integrity” and in our second strategic objective to “providing value for money homes and
services”.
Our Arrangements to ensure delivery of VFM
The Board – It reviews the VFM Strategy and this statement on an annual basis. It takes a
strategic view of the performance of all assets holding the executive to account and driving
forward the VFM agenda.
The Leadership Team – It considers updates on the VFM Strategy and Plan, and the
business case for service delivery changes and new opportunities
Residents Scrutiny Committee – Reporting to the Board, this is our main strategic resident
group. It agrees service priorities, scrutinises our performance and recommends future
improvements to service standards.
Embedding Value for Money
Performance Management – our annual and three year plan objectives (which include VFM
targets) are cascaded through each of our teams to individual staff through their annual
appraisal and target setting.
Financial Stewardship – We have a robust financial plan, and a rigorous annual budget
setting process together with clear audit and financial management systems. Our Audit
committee is now chaired independently from the Board to ensure a real and robust
challenge of the way we do things.
Comparing our costs to others – we benchmark and compare our costs and performance
through ‘Housemark’ a national benchmarking service that ensures we set challenging
targets for ourselves and learn from the best in our industry.
Case studies and past year achievements
The following case studies outline some of our successes in the past year under these
plans;
Increasing our stock by 20% has reduced management costs per home by 8.5%
In the last year we started on an ambitious plan to increase our stock numbers by 20%. In
the year we acquired, from Riverside Housing Group, 428 homes and a further 30 from
Swan Housing creating efficiencies in the cost of managing our stock. The 20% increase in
stock in 2013 is now allowing us to spread our management costs over a greater number of
homes. This has pushed down our budgeted management cost per unit from £565 in the
current year to £517 from next year, an 8.5% reduction. That’s approximately a £100,000
efficiency saving annually.
Providing a daily sheltered housing service for 8.7% less a year
In the last year we consulted our sheltered housing residents on the way in which their
scheme managers provided services to them. This service was funded in two ways, partly
through rent and partly through support from the local authority, a figure which was reducing
year on year. The consultation asked for views on reducing full time scheme managers to
half time scheme managers. A majority of residents supported having a staff member on site
everyday, but only for half a day. This new arrangements produce rolling annual savings of
approximately £25,000.
Better together. Saving £125 per property per year on our maintenance costs
Suffolk Housing is a member of EP Ltd a joint venture company with 8 other housing
associations and local authorities the sole purpose of which is to drive down the cost of
maintenance. In 2012-13 savings were made on buying repairs and maintenance for all nine
members. In total £9.25 Million was saved and Suffolk Housing’s costs were £125 per
property lower than standard industry costs. That’s a monetised efficiency saving of over
£260,000.
Graph: £ saving per property last year for us and our EP Ltd partners
£350
£300
£250
£200
£353
£125
£90
£269
£173
£153
£82
£50
£78
£100
£218
£150
£0
Seeking new savings
Last year finding a new insurer saved us £31,000 and for an improved level of cover while
our gas servicing contract now costs us £17,000 less per annum with an improved level of
service including direct access to our contractor for arranging appointments and live access
to repairs data via a web portal. In addition, our telephone maintenance is now £1000 lower
and with a local company.
Customer Outcomes
Each year we update our “STAR” survey of our residents to obtain an indication of their
satisfaction levels. The latest (2013) results show that despite our savings 94% of residents
are satisfied with overall service and 87% satisfied that the rent they pay provides value for
money. 84% of our residents would recommend Suffolk Housing as a landlord.
Each year we also check our performance against others using the “Housemark”
benchmarking system. This gives us an indication of how we are doing against our peers in
70 different categories. Specifically on cost and quality the following table highlights our
performance against our benchmark peer group of 47 other southern and eastern region
associations.
Business
Activity
Overheads
Major Works
and Cyclical
maintenance
Responsive
Repairs and
Void works
Housing
Management
Estate Services
Cost KPI
Overhead cost
as a % of
adjusted
turnover
Total Cost per
property
major and
cyclical works
Total Cost per
property
responsive
repairs and
void works
Total Cost per
property of
housing
management
Total Cost per
property of
estate services
Housemark Efficiency Summary for Suffolk Housing
Cost KPI Quartile
Quality KPI
2013
2012
Upper
Quartile
Middle Upper
Quartile
Median
Upper
Quartile
Upper
Quartile
Middle Upper
Quartile
Middle Upper
Quartile
Upper
Quartile
Middle Upper
Quartile
Upper
Quartile
Overhead
Costs as a %
direct revenue
costs
% of tenants
satisfied with
overall quality
of their home
% percentage
of homes nondecent
% of tenants
satisfied with
repairs and
maintenance
Average
Number of
days taken to
complete
repairs
Average re-let
time in days
% of tenants
satisfied with
services
provided
Current tenant
arrears as %
rent due
% of tenants
satisfied with
their
neighbourhood
as a place to
live
Quality KPI Quartile
2013
2012
Middle Upper
Quartile
Middle Upper
Quartile
Upper
Quartile
Upper
Quartile
Upper
Quartile
Upper
Quartile
Upper
Quartile
Middle Upper
Quartile
Lower
No data
Upper
Quartile
Upper
Quartile
Upper
Quartile
Middle Upper
Quartile
Upper
Quartile
Upper
Quartile
Upper
Quartile
Upper
Quartile
In service to customers, out of the 8 categories where data has been available for both
years, 2013 showed 8 of the 9 KPI’s in the ‘upper quartile’ performance category an increase
from 5 out of 9 in the previous year.
A fuller “dashboard” of all data can be found on the Suffolk Housing website
www.suffolkhousing.org by following the ‘about’ and then ‘our performance’ tabs.
This statement can also be found in our ‘Financial Statements 2013’. A summary of these
statements is available from steve.pugh@suffolkhousing.org