Value @
Home Group
2013 - 2014
Home Group’s Value for Money Self-Assessment
Contents Page
1. Introduction and context ... 4
1A Background ... 4
1B SWOT analysis ... 6
1C Home Group Value for Money Improvement Plan ... 7
1D Strategic approach: Housing with Care ... 10
2.Corporate governance and involving our customers and clients: ensuring accountability and transparency ... 12
2A Non-Executive and Executive Team structure ... 12
2B Performance and scrutiny ... 13
2C Managing risk ... 14
2D Customer and client involvement in decision making and performance assessment ... 14
2E Criteria underpinning corporate investment decisions: the discretionary spend model ... 17
3.Strategic financial management ... 18
3A Income and expenditure breakdown ... 18
3B Efficiency savings ... 19
3C Approach to financial management ... 20
3D Home Group VfM Key Performance Indicators ... 21
3E Procurement ... 23
4.Benchmarking: how we compare with other providers and learn from best practice ... 24
4A Overview of Home Group’s involvement in benchmarking... 24
4B HouseMark 2012/13 benchmarking report ... 25
4C Sector financial comparisons ... 26
5.Enterprise and Development: managing, expanding and diversifying our asset portfolio. ... 31
5A Asset Management Plan ... 31
5B Supported accommodation assets ... 31
5C Workplace assets ... 32
5D Energy efficiency: reducing waste ... 32
5E Options appraisal model ... 33
5F Development Investment Panel ... 34
5G Commitment to joint venture working ... 34
5H Business case for investing in social and environmental value ... 35
5I Stock survey and modelling ... 36
5J Strategic planning and reviews ... 37
6.Customer Service: income protection and ensuring greater efficiencies ... 38
6A Customer satisfaction ... 38
6B Customer Service Value for Money KPIs ... 38
6C Repairs and maintenance service delivery model ... 39
6D Customer Service Centre (CSC) ... 39
6E Increased efficiencies within anti-social behaviour management ... 40
6F Welfare Income Support Partners (WISPs) ... 41
6G Knowledge management pilot ... 41
6H Zero day void turnarounds ... 41
7.Care and Support – client support and growth opportunities ... 42
7A Client satisfaction ... 42
7B Innovation in existing Care and Support provision ... 42
7C Care and Support Gateway Panel ... 42
7D Measuring the impact of our Care and Support activity ... 43
7E Integrated health services ... 43
7F Ministry of Justice (MoJ) contracts ... 44
8.Understanding and influencing our operating environment ... 45
9.Investment in our colleagues to ensure an efficient and effective workplace ... 46
9A Investing in people ... 46
9B Leaner systems ... 46
9C Colleague innovation ... 47
10.Back office efficiencies ... 48
10A Back office benchmarking ... 48
10B Intelligent organisation ... 49
1. INTRODUCTION AND CONTEXT 1A Background
Home Group is fully committed to delivering Value for Money, which we view as ensuring increased efficiency (adopting a commercial approach) and effectiveness (delivering our social mission in the most cost effective way possible). We are constantly innovating to improve service, efficiency levels and ultimately outcomes for customers and clients. Value for Money is a guiding principle for all parts of the business, and we are working to ensure that we are communicating this effectively to our customers, clients, colleagues and wider stakeholders.
In order to put this VfM self-assessment into context, Home Group is the fourth largest social housing provider in the country. We house more than 120,000 people a year in 55,000 homes across 115 local authority areas. We also work with almost 30,000 vulnerable people in supported housing, justice and health services through our Care and Support arm. Our turnover was £327m last year, and the market value of our asset base is £2.8bn.
We are working to “sweat our asset base”, ensuring Value for Money for the taxpayer, and for our customers and clients. For example, we are undertaking options appraisals of our properties in order to determine the most cost effective approach to asset management and minimising long term voids going forward. In adopting this approach, we are making sure that we are spending money wisely and are not investing in stock that does not generate a return. In contrast, we are now able to evidence where asset disposals have generated money, and where investment decisions deliver a positive Net Present Value.
We aspire to be the best in sector and beyond, and understand that we need to ensure accountability, transparency and strong management of resources in achieving positive outcomes for our customers and clients.
Efficiency savings in 2013/14 amounted to £10.2m, which represents 3.1% of turnover. We plan to save £44.6m over the next five years in procurement and operating efficiencies, and our aim is to exceed this target through improving performance in a number of areas, e.g. voids.
These efficiency savings allow us to invest to save in the long term and enable us to deliver added value activities for our customers and clients – for example last year we invested £11.3m in starting to implement our Home Investment Standard, which exceeds Decent Homes Standard. Once fully implemented, this will reduce our responsive maintenance costs. Our approach to investing to save can also be seen in the introduction of our new Enterprise Resource Planning system in 2017, which following an initial c£30m investment to integrate 45 different systems, will lead to estimated savings of £9.5m per annum, £6.8m of which are above those identified in Home Group’s Business Plan. The new system will also position the business to be more competitive in delivering new types of contracts, as well as enabling more efficient models of delivery.
While driving forward efficiency savings, we have maintained high customer and client satisfaction levels in 2013/14 (92% and 93% respectively), which we believe provides evidence that high quality service delivery is being maintained.
External recognition of our achievements
Home Group has been the recipient of a number of awards over the last year. This external recognition by our peers and external assessors is testament to the work of our colleagues and the valuable time and engagement given by our customers and clients.
• Leader of the Year for Mark Henderson, Chief Executive of Home Group, at the first ever Chartered Institute of Housing North East awards.
• Number 1 in the UK’s top 50 landlords – judging and poll convened by 24Housing. • Investors in People Gold Award.
• Contact Centre of the Year for our Customer Service Centre (North East Contact Centre Awards).
The recognition of our strengths and achievements set out in the box above is a real honour. We constantly strive for success and improvement, and innovate to ensure we are maximising efficiency and effectiveness. However, we know we have more to learn and put in place, and this self-assessment sets out a number of the areas for improvement that we have identified.
The next page sets out a high level Value for Money ‘SWOT’ analysis (strengths, weaknesses, opportunities and threats) of Home Group from a VfM perspective. This has been undertaken internally and is being further refined as part of our strategy review process (see Section 1D below). It will be updated regularly and reported on annually within our VfM self-assessments going forward.
Our Improvement Plan at Section 1C has informed - and been informed by - our team Operational Plans, and clarifies how we intend to address the weaknesses and threats identified in the SWOT analysis and other parts of this self-assessment.
The Conclusions section of the self-assessment (Section 11) includes a table which cross-references to parts of this document to evidence how we believe we meet the Value for Money Standard. In addition, our 2013/14 Financial Statements (available at www.homegroup.org.uk) include a Value for Money Statement which is structured around how we meet the Value for Money Standard.
1B SWOT analysis
Strengths
• Size and scale of the business
• Strong surplus
• Low gearing ratio (to be increased in a prudent
way in line with our development plans)
• High asset value
• Good reputation and strong track record in
delivery
• Not for profit – socially motivated and delivering
significant added value activity
• High investment in colleagues
• High levels of customer and client involvement
and engagement
• High quality of leadership, knowledge and
experience of colleagues
• High levels of customer and client satisfaction
• Strong reputation in Care and Justice fields
• Robust performance and scrutiny systems in
place
• Strong drive for efficiency savings, e.g. through
workplace rationalisation programme and Customer Service Centre
• Model in place to determine discretionary spend
priorities and manage trade offs
Opportunities
• Greater integration of Care and Support and
general needs activity
• Increasing levels of public sector outsourcing
• Capacity for growth in Customer Service Centre
activity
• Potential for further Development led community
regeneration schemes, e.g. flagship Rayners Lane development
• Full stock survey currently underway and planned
sustainability modelling to be put in place
• Demographics – ageing population and
potentially other markets to move into
• Diversification of activity into health and social
care, and further into criminal justice
• Diversification into new geographical areas and
mixed tenure developments to cross-subsidise affordable housing development
• Implementation of Enterprise Resource Planning
(ERP) approach
• More joint venture approaches to development
• Benchmarking and ‘buddying’ with RPs and
private sector to enhance learning and sharing of best practice
Weaknesses
• Low utilisation and communication of
benchmarking (1b in Value for Money Improvement Plan, i.e. VfM IP)
• IT systems and manual data inputting not fit for
purpose (45 separate systems currently) (4b in VfM IP)
• Management and maintenance costs relatively
high (1c in VfM IP)
• Cost to serve data is high level – need more detail
(1c in VfM IP)
• Voids performance needs to improve across
general needs and supported housing stock (1a in VfM IP)
• Arrears levels high relative to sector (1a in VfM IP)
• Limited level of detail of stock and components
knowledge (3a and 3b in VfM IP)
• Relatively low perceptions among clients with respect
to Home Group achieving VfM (2a in VfM IP)
• Customers do not currently have sufficient
structured opportunity to feed back on VfM (2b in VfM IP)
• Lacking detailed knowledge of customer and client
base, which limits ability to target and plan (4c in VfM IP)
Threats
• Reduction in Affordable Housing Programme and
Supporting People grants meaning increased cross-subsidisation of activity necessary. Potential for further austerity measures within national policy leading to further budget cuts (1a and 1c of VfM IP around mitigation measures for Welfare Reform and improving operating margin for self sustainability)
• Welfare reform potentially leading to increased
arrears, evictions and voids (1a in VfM IP)
• Increasing cost of living - particularly in the South
- leading to difficulties retaining colleagues while delivering competitively priced services (1c of VfM IP)
• Other RPs undergoing challenges (e.g.
Cosmopolitan), potentially leading to knock on effects for the wider sector in terms of lending rates etc (4a and 4b of VfM IP around managing our systems and regulatory reporting)
• Significant demand for housing in the South, but
most of Home Group’s stock is currently in the North (3b of VfM IP)
Home Group VfM SWOT
analysis
1C Home Group Value for Money Improvement Plan Area for improvement identified in
VfM self-assessment
Action/s Target outcomes and timescales
Responding to relatively low levels of performance (see Sections 3D, 4A, 4B and 4C of self-assessment) 1a. Address voids and arrears issues
highlighted within performance data: • HouseMark 2012/13 red and red/
amber VfM areas, including total cost per property of voids and levels of arrears.
• Missed target in our KPIs (2013/14) around reducing voids.
Review void costs at property and scheme level.
Work across the business in an integrated way to reduce voids, including options appraisals on hard to let voids and drive up zero day void turnarounds.
Continue to use Welfare Income Support Partners ‘WISPs’ and Customer Service Centre to further address issues arising through welfare reform.
Continue to deliver Affordability filter to support some customers on low incomes.
Ensure that as Universal Credit is rolled out, customers and clients are supported in managing their rent payments to minimise arrears.
Deliver Business Plan targets for voids and arrears: Customer Service voids reduced to 1.1% and Arrears to 4.9% by 2018/19.
Continue to reduce Care and Support arrears levels (2% decrease achieved from 2012/13 to 2013/14), and work to reduce Care and Support voids, while recognising the need to have some flexibility in availability of empty properties as required by commissioners on some contracts. Regularly review targets to ensure they are sufficiently stretching (see 1b).
1b. Utilise benchmarking data more effectively.
• Increase access to benchmarking data across the business.
• Increase use, scale and
communication of benchmarking activity, including capturing Care and Support and Home Scotland activity in HouseMark submitted data.
• Use Benchmarking data and peer performance to set more stretching targets.
• Internally, Business Leadership team (BLT) to use benchmarking to learn and roll out new ideas. • Build learning from benchmarking
into new ERP system (see
Integration and Information Section 4 below).
• Ensure consistent and systematic approaches to participating in benchmarking clubs, including with similar peers.
Improved benchmarking by March 2015, and input to HouseMark for 2014/15 financial year reporting. BLT benchmarking approach in place by December 2014.
Stretching targets in 2015/16
Business Plan on areas where relative performance is weaker.
Area for improvement identified in VfM self-assessment
Action/s Target outcomes and timescales
1c. Address ‘cost to serve’ issues (operating margins, management, repairs and maintenance spend) highlighted within performance data: • Improve ‘cost to serve’ data
– further detailed breakdown required.
• HouseMark VfM red light areas for 2012/13, including total cost per property of responsive repairs and housing management
• Sector Financial Comparisons data (2012/13) highlighted relatively high operating costs as a percentage of turnover
• HouseMark financial benchmarking (2012/13) highlighted a relatively low operating margin.
Develop cost to serve and activity based costing measures.
Work to improve performance through learning from best practice RPs in this area, rolling out planned maintenance work, completion of stock condition survey and continuing to implement efficiency savings.
Drive contractor efficiencies: • Implement full incentive/penalty
scheme (bonus/malus) for contractors in 2014/15.
• Identify and deliver opportunities to improve contractor efficiency. • Identify & deliver ways to improve
the way we spend non-price per property repairs budget.
• Implement coordinated approach to drive contractor efficiency and planned maintenance programme. • Implement job appointment system
solution with contractors. • Improved process to control job
cancellations by contractors. Care and Support Gateway Panel assessments around profitability of future contracts to continue to reduce level of high volume, low margin contracts.
Continue efficiency savings challenge across the business through innovation in all Directorates.
• Additional data to be reported on from 2015/16
• Higher levels of planned
maintenance, reducing responsive repairs costs.
• Increased contractor efficiency (goal of 3% contractor efficiency by March 2015 equating to £1.6m savings pa).
• £1.2m cost-benefit by December 2014 through job appointment system.
• Increase in profitable care and support contracts, taking into account higher costs of employment in the South, reducing overall levels of operating costs. • Deliver efficiency savings
identified in 5 year Business Plan (£24.7m procurement savings and £19.9m through operating efficiencies).
Area for improvement identified in VfM self-assessment
Action/s Target outcomes and timescales
Customer and Client Assessments of VfM (see Section 2D of the self-assessment) 2a. Perceptions among our clients of
our Value for Money performance are relatively lower than for other areas of the Client Promise
Improve perceptions through enhanced use of external communications to improve awareness of VfM activity, ensuring efficiency savings do not impact on service quality.
Increase the percentage of gold/silver standard assessments to 60% by March 2015. (Further explanation of ratings in Section 2D)
2b. Need to capture customers’ assessments of VfM performance in a similar way to clients.
Roll out a similar assessment approach to our customer base through the Customer Scrutiny Model.
Piloted by March 2015, and fully rolled out by December 2015.
Area for improvement identified in VfM self-assessment
Action/s Target outcomes and timescales
Asset Management (see Section 5 of the self-assessment) 3a. Improve data and systems to model
performance of assets on an ongoing basis.
Implement a system based sustainability model covering all of Home Group’s assets.
Model in place by March 2015 which will lead to clear assessments about which homes should be invested in, converted or disposed of.
3b. Develop a full understanding of the asset base.
• Processes in place to ensure 100% credibility of asset data including component renewals, planned works and one off renewals. • Approach to reviewing
components, costs and lifecycles mapped out.
• Care and Support leases reviewed and data stored.
• Stock surveys effectively programmed in consultation with key stakeholders.
• 100% stock condition upload to Home systems.
• 100% component life visibility. • 100% surveys completed and uploaded in system by March 2015.
• 90% customer satisfaction with survey.
• Future NPV targets agreed by April 2015.
• Reduction in responsive maintenance costs from 19% of housing income in 2014/15 to 17.9% in 2018/19 due to greater stock awareness and roll out of Home Investment Standard. • Enhanced understanding of our
stock ensures development plans are based on full understanding of the evidence base.
Area for improvement identified in VfM self-assessment
Action/s Target outcomes and timescales
Integration and information (see Sections 2B and 10B of the self-assessment) 4a. A more integrated approach to
regulatory reporting
Develop a regulatory score card, and set up a national group up to oversee monitoring and challenge on a bi-monthly basis.
Scorecard reported on to Executive Team and Board by December 2014.
4b. Build greater systems integration to address issue of legacy systems not linking together effectively.
Take detailed resource plan to Executive team and move towards implementing the Enterprise Resource Planning approach, ensuring effective systems integration.
£30m investment in systems overhaul to be completed by 2017 – estimated £9.5m savings pa (£6.8m of which is in addition to identified Business Plan savings) following implementation 4c. Improve current and future
customer profiling intelligence to enable greater targeting of resources.
Intelligence on customers and clients reviewed and proposals to improve accuracy of databases developed.
Proposal made by December 2014, and implemented from March 2015
1D Strategic approach: Housing with Care
Home Group’s activity is guided by the corporate and financial strategy we produced in 2012, Housing with Care. Our mission is “to help our customers and clients to open doors to new opportunities and healthy lives”.
The strategy sets out that our pre-eminent strategic objective in the light of changes to our operating context is to very significantly grow Home Group’s surplus to ensure our financial independence and allow us to deliver Home Group’s mission for the benefit of our customers and clients.
Housing with Care guides all operational plans within the organisation. Home Group’s Board steered the development of the priorities within the strategy, and has taken ownership of their delivery. The priorities were refined through discussions with key stakeholders including, importantly, our customers and clients. Involvement events took place with our Customer and Client Panel to feed into key elements of the strategy, and regional ‘footsteps’ events were held with customers and clients to help us develop routes to achieving our mission and objectives. In addition, through profiling our customer and client base we aimed to identify potential impact and opportunities presented by the proposed strategic priorities. Further information on customer and client involvement can be found below in section 2D.
Operational plans derived from Housing with Care include: our five year rolling Business Plan; Asset Management Plan; Future Workplace Plan; Development Plan; Risk Strategy, and our annual team operational plans. All of these are being reviewed in line with emerging challenges and opportunities.
Over the last year, Home Group has taken stock of the many differing demands on organisational resources. On the basis of this, and guided by the Housing with Care strategy, we developed 10 ‘Blue Chips’ (see diagram below). These Blue Chips are the areas we must focus on as a business in order ensure efficiency and effectiveness of delivery. The Blue Chips were identified through ‘Living Our Values’ sessions (see Section 9A) with our Leadership Teams and Board, around what constitute the key priorities for the organisation. The Blue Chips methodology was developed by Senn Delaney Consulting Group and is a tried and tested business improvement tool derived from Pareto’s 80/20 principle. In transposing Pareto’s theory, this can be viewed as a business spending 80% of its time on things that achieve 20% of its results, and the other 20% of its time achieving 80% of its results. Like all businesses, we want to spend more time focusing on the areas with the greatest potential impact. Over the coming year we will be reviewing the Blue Chips and further refining our priorities.
Home Group’s 10 Blue Chips
Examples of projects being taken forward as part of the Blue Chips programme are set out within this document. They include: • The implementation of the Home Investment Standard to exceed Decent Homes Standard across our stock and ultimately
reduce responsive maintenance costs (see Section 5H).
• Workplace rationalisation to achieve significant efficiency savings (see Section 5C).
• Increasing intelligence around stock quality, future Net Present Value and component lifecycles to enable us to maximise return on assets (see Section 5I).
• Innovative approaches to income protection to reduce risks associated with the roll out of Welfare Reform (see Sections 6F, 6G and 6H).
• Delivering the Living our Values programme to all colleagues, and embedding values in our day to day work to maximise efficiency and effectiveness (see Section 9A).
• The implementation of a new Enterprise Resource Planning system to integrate 45 non-compatible systems requiring manual inputting, resulting in significant savings (see Section 10B).
• Developing growth opportunities within the spheres of Health and Justice to enable business diversification and generation of new income streams, while adhering to our core social mission (see Sections 7E and 7F).
Our strategy and plans are communicated through a wide range of channels, including:
• Internal communications with colleagues, e.g. webinars, intranet resources, targeted, business specific emails, face to face events and training modules;
• External communications with customers and clients, including panels and workshops, accessible literature and web forums. • External communications with wider stakeholders, including the HCA, commissioners and other partners through face to
face dialogue, targeted literature and the media. Reflecting and responding to new challenges
Our Housing with Care Strategy was developed for the time period 2012/13 to 2016/17. However, in the light of evolving political, economic, social, environmental and technological drivers, we feel it would be sensible to review the corporate and financial strategy over the next year. This document will also form our Value for Money Strategy, as VfM must underpin our guiding corporate documents. The principles of VfM underpin all of our strategies and plans, but we recognise the need to make this more explicit, and particularly with respect to how all of our systems adhere to the Value for Money Standard.
We regularly use the communications mechanisms set out above to seek feedback from colleagues, customers and clients and wider stakeholders on our strategic approaches. This, in turn, is used in our strategic planning. This feedback loop will be critical in the forthcoming review of Housing with Care.
2. CORPORATE GOVERNANCE AND INVOLVING OUR CUSTOMERS AND CLIENTS: ENSURING ACCOUNTABILITY AND TRANSPARENCY
2A Non-Executive and Executive Team structure
Home Group’s non-executive governance structure is set out below. As of 2014/15, the National Customer Panel is being replaced by a Customer Forum which focuses primarily on customer and client scrutiny across all of the regions.
Home Group’s Non-Executive Structure
Live Smart@Home (company registration number: 3402204) is a private non-charitable company providing market and mid-market rented products. Home Group Developments Ltd (company registration number: 4664018) is a private non-charitable company which undertakes market housing for sale and the new build construction of affordable housing for rent.
The Home Group Board sets the strategic priorities for the subsidiary companies and for the whole organisation. The high level direction is set out within the Housing with Care strategy, and is further refined within Plans derived from Housing with Care (see Section 1D).
These agreed priorities are driven forward by the Executive Team who are tasked with innovating and achieving more efficient and effective ways of delivery, in an era of significantly reduced grant funding.
Home Group’s Executive Team
Value for Money underpins everything that Home Group does, and is embedded throughout the business, from the Board downward. The Board has agreed to the ten ‘blue chips’ set out previously, and the four organisational values of Commercial, Accountable, Energised and Caring. (See Section 9A for more details of how we are ‘Living our Values’ as a business.)
2B Performance and scrutiny
Performance and scrutiny systems are in place to drive forward the Value for Money objective. These include:
• The Board, Board Committees and Subsidiary Boards regularly scrutinise financial and performance data. The Board sees VfM as a key driver for the business alongside achieving our social mission, and therefore ensures that efficiency and effectiveness underpins all of Home Group’s activity. In considering proposals that have a financial impact, the Boards and Committees consider Value for Money as part of their decision making.
• Fortnightly Executive Team meetings with colleagues within the business to challenge on the pursuit of objectives and achievement of Value for Money. All colleagues taking recommendations to Executive Team have to fully cost them, consider alternative options and ensure that the most efficient and effective solution is recommended. The proposals are then challenged by Executive Team from a VfM perspective, using the discretionary spend model set out in Section 2E as a guide. • Internal Business Assurance function which carries out certain specific audit reviews from a VfM perspective and reports
to the Audit Committee on its findings.
• Internal Regulatory Improvement Group with senior representatives from across the business, which meets every month to assess progress against the Consumer Standards, and drives forward improved performance. Key activities include: the development of a self-assessment tool to monitor compliance with regulatory standards across the business; horizon scanning and analysis to ensure that key policies meet the regulatory requirements from the HCA and Scottish regulator; and review and report results from regulatory self-assessment to the Executive and Board to provide assurance of regulatory compliance and recommend improvement actions.
• Customer and client assessments of progress, for example, client assessors’ perspectives on the extent to which we are achieving Value for Money. In 2013/14, clients concluded that of all the Client Promises, they are least clear about how we are pursuing and achieving Value for Money, and that we need to be more transparent in our communications. It is also planned to develop a Customer Scrutiny Model as part of our Customer Insight activity, led by the Customer Service Centre. Customer and client involvement has led to efficiency savings within the business (see Section 2D for an example of where customer involvement led to £400,000 efficiency savings in ground maintenance services in the South region).
• Performance through people where colleague performance is robustly assessed against SMART objectives derived from the organisational priorities as articulated within the ten priority ‘Blue Chips’ (see Section 1D). A key element of our investment in people relates to rolling out our culture change programme, Living our Values. One of our four core values is ‘Commercial’ and another is ‘Accountable’, demonstrating the importance of the VfM mind set and approach to the business (see Section 9A). Our system of scrutiny is due to be further enhanced with a more integrated approach to capture all regulators/commissioners’ expectations - including the Economic and Consumer Standards – across the whole business. A regulatory score card will be produced on a quarterly basis by the Regulatory Improvement Group which will be expanded to include regulation of non-core activity. This will be regularly reviewed to ensure it is fit for purpose.
Embedding Integration across the business
Home Group is engaged in a wide variety of activity across our general needs and care and support arms. This activity is diversifying and there are many areas where joint working between different parts of the business can reap significant results from a VfM perspective, for example:
• Learning from respective mechanisms of measuring and benchmarking;
• Building on relationships with commissioners developed through certain parts of the business, potentially opening up new commercial opportunities;
• Joining together systems, e.g. around addressing anti social behaviour to minimise duplication;
• Reducing the number of voids by making them available to care and support clients, in addition to general needs customers; • Sharing approaches to reducing arrears and applying best practice;
• Sharing back office functions to ensure greater efficiency and economies of scale;
• Where there is a shared footprint, demonstrate move on accommodation for clients from supported to general needs housing – this can be a unique selling point in some geographical areas, and is likely to be well received by commissioners.
A decision was taken in 2014 to ensure that integration (formerly termed ‘Home Care’) is a guiding way of working across the business, and that this links into the new Enterprise Resource Planning system. In order to quantify the impact of this, colleagues will develop indicators to measure any efficiency savings arising from this greater emphasis on integration.
2C Managing risk
A rigorous approach to managing risk is critical to achieving strong financial management. Home Group’s Risk Strategy is currently being reviewed, and ensuring effective and efficient operations will continue to be a guiding principle within the revised document. The Board is ultimately responsible for the Risk Register, with named senior colleagues as risk control owners.
The Risk Strategy currently being revised will ensure regulatory compliance and a clear assessment of cost:benefit ratio with regard to our activity. Home Group’s risk management scoring grid assesses likelihood against impact, with impact categorised around Financial, Reputation, Customer Service/Continuity and Regulatory risks. Risks on the register are constantly under review by control owners and captured and updated through an electronic system. The revised strategy will build in improvements to current processes, and is expected to be finalised in summer 2014.
2D Customer and client involvement in decision making and performance assessment
Home Group engages in significant customer and client involvement. Our Involvement Team works with colleagues across the business to ensure we work in a joined up, consistent way to maximise involvement, measure its impact, fulfil our regulatory requirements and provide new and innovative ways to work with our clients and customers.
We engage and involve our customers and clients through a variety of mechanisms. For example, our online community encourages instant feedback, and last year we invited responses to the question: “What does Value for Money from Home Group mean to you?” Such fora enable customers and clients to challenge Home Group on the efficiency and effectiveness of service provision, and this in turn feeds into future service design. Our mechanisms of involvement are set out below.
Customer and Client Involvement
Client involvement in Cornwall
Following recognition that there were a number of barriers to client involvement in Cornwall (e.g. geography, lack of public transport links and limited resources), a strategy was put in place to develop involvement opportunities across the County. The business piloted a new approach, which required paying for an involvement lead, based in Cornwall, for one day per week for three months to develop involvement opportunities across the geographical area. Between November 2013 and January 2014, activities including workshops, client assessments, recruitment training sessions and client involved interview panels were held. Six client assessors and six client recruiters were trained, creating a bank of trained clients for the area.
This approach has led to an increase in involvement in groups previously identified as hard to reach and difficult to involve. Home Group’s added social value can be identified through clients involved in workshops and other sessions reporting increased confidence, skills development and enhanced knowledge of our services. Following Home Group’s intervention, 75% of clients are now looking for work or have taken up voluntary work, 50% of clients are involved in other involvement activities and 25% have started training courses.
The pilot has informed us that by employing an involvement lead in Cornwall, we are embedding involvement in the area, tailoring involvement methods and opportunities to suit clients’ needs, and the specific geography and service provision in the area. Relative to other solutions, this is an effective and cost efficient model (saving an average of £528.14 per involvement activity compared with the previous approaches in place) for increasing involvement across a geographically hard to reach area, supporting our business approach to flexible working and efficiency. Client and customer assessors supported this conclusion, assessing this approach as being low cost and high impact, and ultimately achieving high Value for Money.
One of the ways we ensure effective and efficient service delivery is through our customer and client promises. Client assessor ratings of client promises
Our clients regularly assess us against the client promises. The graph above summarises client assessors’ perspectives of how we are meeting these promises (activity undertaken between April 2013 and March 2014, reported on in May 2014). The client promises include: a decent home; Value for Money; a safe place to live; a choice of products and services; reliable services; clear information and opportunity to influence; and people who care.
Client assessors were drawn from across the country and conducted 56 client service assessments. Assessments involved 319 clients across a range of different services, enabling clients to have their say about the service they receive and make suggestions for improvements. While over 50% of VfM assessments attained gold or silver standards (standard definitions were agreed with involvement colleagues), it is notable that perception of delivery of VfM is the lowest performing of all of the Client Promises. We aim to improve performance on this perception among our client base in future years, and to roll out this assessment approach to our customer base.
The table below sets out the types of issues highlighted by clients, and actions taken in response to their comments. Value for Money: Client assessors
Good practice and areas for improvement Actions taken in response to clients’
recommendations Good practice
• Rent and service charges are clearly set out and clients receive regular information on local budgets
• Clients have a say on how the money is spent and agree the products and services they receive
• Clients are involved at local budget setting meetings
• Clients know how much their service costs and on the whole, feel they get good Value for Money
Areas for improvement
• Few clients said they receive a breakdown of their rent, service charges and local budget as a matter of course and some are unable to make a Value for Money judgement due to a lack of information
• Clients reported feeling confused by their rent and service charge statements • Few clients understood why their rent or service charges increased and would
like better explanation
• Few clients know how they can get involved in how the money is spent and budget setting
• Clients don’t always believe that the money is spent as advised by colleagues
• Increased opportunities for involvement in budget setting; at client/ house meetings, team meetings and through client consultations
• Better communication between clients and staff about local budgets
• Development of easy read budget reports for clients at some local services
• Increased consultation with clients about how the money is spent • Increased involvement in the
products and services we buy to reflect better Value for Money
We view customer and client involvement as fundamental to achieving Value for Money, including social value. Our Viewpoint teams, for example, are involved in service reviews and can contribute to major savings (see box below). Customers and clients can initiate new ideas, for example the ‘WISPs’ approach (see Section 6F), which emerged from customer involvement discussions.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Gold Silver Bronze No Standard Overall standard achieved A decent home V
alue for money A Safe Place
to Live
A
choice of products and services Reliable services Clear information and opportunities People Who Care
The Added Value of Customer Involvement
In 2012, the Viewpoint team in the South region worked with customers in their review of Estate Services (specifically ground maintenance and communal cleaning works). Until this review, contracts had no provision for financial penalties for late or sub-standard work, didn’t have clear detail around service delivery areas, and weren’t consistent across the area (each office retendered for their own individual estates).
Through this review, customers and the Viewpoint panel confirmed that the contractors and specifications were not delivering optimum Value for Money. A revised tendering process (OJEU compliant) took place and assessed both efficiency and effectiveness – ensuring quality at the right price. The OJEU process enabled us to benchmark our services in the current market place and develop new specifications. Two Home Group customers on the working group involved from the outset helped to set the specification, participated in all meetings (including tender scoring and interviews), and were part of the final decision making process.
The approach, which was informed by the needs and perspectives of our customers, resulted in a cost saving of approximately £400,000 per annum from 2014 to 2016, while delivering an improved service to customers. From 2014/15 our customers have benefited from a reduction in their service charge as a consequence of these savings.
The above is an example of how customer and client activity can both assess VfM and make an impact. There is a need to ensure that all customer and client involvement activity we engage in similarly assesses impact – assessing both the VfM of the activity itself and the VfM outcomes of involvement with respect to business operations.
2E Criteria underpinning corporate investment decisions: the discretionary spend model
We have clear mechanisms in place to make decisions around investments, based on the principles set out within our core strategy. The discretionary spend model below was included within Housing with Care and continues to provide the basis on which all parts of the organisation make decisions. This approach helps evaluate return on investment (both financial and social), and enables consideration of potential trade-offs, particularly between our commercial objectives and social mission. It ensures that Value for Money underpins all investment decisions within the organisation.
Discretionary Spend Model
A great example of application of the discretionary spend model and addressing possible tensions between commercial and social objectives is in the development of our Affordability Filter and the decision around exceeding Decent Homes Standard for our properties by implementing the Home Investment Standard (see Section 5H).
3. STRATEGIC FINANCIAL MANAGEMENT 3A Income and expenditure breakdown
The pie charts below set out a summary of Home Group’s capital and revenue income and expenditure for 2013/14. The income pie chart illustrates the importance of self-sustainability given the relatively low proportion of grant received (this is decreasing programme by programme). The expenditure pie chart illustrates that by far the majority of our expenditure is targeted at investing in, managing, maintaining and repairing our stock. Through the self-assessment process, we have been able to assess how efficiently and effectively we are managing our stock and delivering our services.
Home Group’s Total Capital and Revenue Income and Expenditure Breakdown 2013/14
Our expenditure in 2013/14 was greater than our income. This is a result of significant investment in new properties which will increase our income in future periods. We have funded this through additional borrowings
3B Efficiency savings
Home Group’s strategic approach to efficiency savings (as set out in our Housing with Care corporate and financial strategy 2012, and continuing to guide activity):
• More flexible and leaner back office services;
• Delivering the management restructure of our supported housing services;
• Increasing efficiencies through closer, more integrated working between overlapping areas of our general needs and supported housing activities;
• Continuing to increase the efficiency and consistency of our front line general needs housing services, through significantly increasing the ratio of number of units per front line FTE;
• Increasing maintenance efficiency year on year; and
• A more efficient approach to asset management (including maintenance).
Going forward, there will be many areas of efficiency savings and growth opportunities. This includes, for example: workplace rationalisation; options appraisal to maximise return on investment of low demand and void properties; consolidating and outsourcing repairs and maintenance contracts on a bonus/malus basis; significant efficiency savings to meet challenging targets on our revenue maintenance and repairs budgets already underway (this is as a result of increased investment in our assets); and an enhanced role for the Customer Service Centre in order to centralise services and ensure consistency of cost, quality and contract management.
We are building planned efficiency savings and commercial growth opportunities into our rolling five year Business Plan/ operational plan timeframe, but also recognising within this the challenges to our income stream through, for example, Welfare Reform (see Section 6). Overall efficiency savings identified in our five year Business Plan are as follows:
Home Group Business Plan Efficiency Savings
Efficiencies Savings (£millions)
2014/15 2015/16 2016/17 2017/18 2018/19 Total
Procurement savings 3.2 4.4 4.0 6.5 6.6 24.7
Explicit operating efficiencies 0.4 3.7 4.5 5.4 5.9 19.9
Total 3.6 8.1 8.5 11.9 12.5 44.6
The efficiency savings set out within our Business Plan enable us to invest in our existing homes, service provision and new development opportunities. This is primarily about investing to save in the long term. Examples include:
• Reducing the responsive maintenance cost from 19% of housing income in 2014/15 to 17.9% in 2018/19, and total maintenance as a percentage of housing income to fall from 48.6% in 2014/15 to 39.6% in 2018/19, as a consequence of implementing planned maintenance and Home investment Standard (see Section 5H).
• Investing in a more efficient workforce (e.g. through increased self-service, automation and flexibility) with employment costs of support functions planned to fall from 5% in 2014/15 to 4.5% in 2018/19, resulting in an implicit efficiency saving of £2m per annum (see Sections 9B and 10A).
• Due to recent revisions in budgets, we have identified an additional saving (beyond the Business Plan figures) of £6.8m per annum from 2017/18 through the introduction of the Enterprise Resource Planning system to integrate 45 separate systems (overall savings of £9.5m per annum through ERP following an initial investment of c£30m) (see Section 10B).
3C Approach to financial management
Home Group has a robust and strategic approach to financial management. This is reflected within our Standard and Poor credit rating of A+, Homes and Communities Agency viability rating of V1, gearing ratio of 47.4% and high level of surplus (9.3% underlying surplus before tax as a percentage of turnover). We have robust systems in place in terms of committing investment in Development (see Section 5F for our Development Investment Panel) and also in identifying which contracts to pursue (see Section 7C for our Care and Support Gateway Panel). These structures, clearly linked into the Board, enable a rigorous assessment of VfM in our investment and contract decision making processes.
Home Group monitors income/expenditure against our cash flow and surplus targets on a monthly basis. In addition, we collect Management Information performance on a monthly basis, led by our Customer Insight team at the Customer Service Centre. This includes performance data around arrears, voids, customer satisfaction, repairs and other key areas and is measured against our targets. All colleagues access this information through the monthly ‘Home Essentials’ webinar where a scorecard summarises our performance against targets, enabling the business to understand the extent of our efficiency and effectiveness. Summaries of our performance are included in our Annual Report and provided at our Annual General Meeting (AGM).
Our longer term aspirations and financial projections are set out in our five year Business Plan and thirty year financial forecasts. The Business Plan is subject to rigorous stress testing which allows us to gain a thorough understanding of the risks we are exposed to and to demonstrate the mitigations we would pursue should the outlook deteriorate. This gives confidence to our stakeholders that we maintain the right balance between investing for the benefit of our customers and clients and demonstrating financial viability in the longer term.
Our Financial Statements (including our Operating and Financial Review), are launched at our AGM. In 2013, our AGM was broadcast live via webcam. This builds transparency in our approach to communicating our year end financial outcomes. We aim to do more in terms of communicating our income and expenditure, particularly with respect to providing a clear breakdown of cost to serve for different parts of the business, and the associated quality of service. We are working to understand and communicate more effectively the costs and outcomes of delivering specific services, and which underlying factors influence these costs. For example, while we undertake an annual exercise at scheme level around Customer Service performance, e.g. around voids, profitability and impairment tests, this does not currently include a breakdown of central overheads to a scheme level (i.e. the focus is on direct, rather than indirect costs).
Understanding the detailed costs of service delivery and where efficiency savings can be made.
Home Group’s Care and Support function is leading the way in the business in gaining a higher level of insight into the profitability of individual services and contracts. Significant progress has been made since the end of 2012 in understanding the costs of Care and Support service provision and this has highlighted areas for further efficiency savings.
As a result of our analysis we were able to determine a target for the profitability we require from our Care & Support contracts to cover local and corporate overheads and generate an acceptable overall level of return. This is used in assessing bids for new contracts and services as part of our Gateway process (see Section 7C), and has led to the business pulling out of pursuing some contracts. We are also able to take into account business growth and contraction and the impact this would have on the returns we should be targeting. This approach is working very effectively and the intention is to extend this to other parts of the business to improve our overall operating margin.
Our aspiration is to ensure we have easily accessible, transparent, fit for purpose financial systems which generate robust, accurate and timely financial management information, and we are undoubtedly moving towards this. The new and ambitious Enterprise Resource Planning (ERP) system we are investing in will drive forward the efficiency of our collation and analysis of data. It will enable alignment of all systems within the organisation, and more efficient and effective sharing of information (see Section 10B).
A key part of transparency is around enabling constructive challenge in setting budgets. Our annual zero based budget review enables such challenge and transparency in budget setting. All members of the Senior Leadership Team (who report directly to the Executive Team) attend Executive budget meetings to set out the business case for their proposed budgets for the forthcoming year (aligned with corporate strategic priorities). They are challenged by the Executive Team and must justify their spend intentions, including how it meets the Value for Money principle. The Executive Team makes recommendations to the Board following this process, and the Board then decides whether to approve the budget, ensuring full corporate ownership.
3D Home Group VfM Key Performance Indicators
An ongoing challenge we face is how to maintain our customer and client satisfaction levels while driving greater savings – ensuring we achieve both efficiency and effectiveness. Our customer and client satisfaction levels are currently very high (92% and 93% respectively in 2013/14), and we see this as an important indicator of how our investments are achieving positive outcomes (providing evidence of effectiveness), representing the added value we generate as a business.
Measuring our Key Performance Indicators against targets and comparing this with benchmarking data (see Section 4) to understand how stretching our targets are, enables us to assess where we are performing well from a VfM perspective, and where we need to improve, while ensuring we continue to deliver the quality of homes and services our customers and clients expect from us.
The table below sets out Home Group’s performance on Value for Money KPIs against targets and previous year’s performance. Value for Money Key Performance Indicators
Home Group Value for Money Key Performance Indicators Home Group 2013/14 Actual Home Group 2012/13 Actual Home Group Target 2013/14 Home Group Target 2014/15
Effective interest rate 5.2% 5.2% 5.5% 5.2%
Gearing ratio 47.4% 47.0% 53.8% 55.6%
Adjusted net leverage 35.7% 35.5% 38.9% 39.8%
Underlying surplus before tax as a % of turnover 8.6% 9.5% 5.6% 8.0%
Debt per unit (£000) 13.2 12.4 14.7 16.1
Total operating margin 19% 20.0% 16.3% 19.7%
Social housing management costs as a % of
social housing turnover 26.2% 25.7% 28.0% Not available
Social housing lettings voids as a proportion of
social housing letting income 2.9% 2.7% 2.6% 2.8%
Arrears as a percentage of rents:
Customer Service 5.1% 4.9% 5.5% 5.5%
Arrears as a proportion of rents:
Care and Support 7.6% 9.6% 7.8% 8.5%
Maintenance spend on social housing property
as a % of social housing letting income 41.7% 40.2% 49.5% 45.6% Finance costs as a proportion of turnover 10.8% 10.7% 12.1% 12.1% Social housing maintenance per social housing
unit (£000) 2.1 2.0 2.4 2.3
Social housing management cost per social
housing unit (£000) 1.3 1.3 1.4 Not available
Underlying surplus represents our surplus before including surpluses from selling existing housing properties. The VfM KPIs reported above are generally at a Group level unless otherwise stated.
Home Group’s targets have been developed internally as part of the budget setting process, and are based on previous years’ performance. We do not currently routinely collect social housing management costs as part of our budget process and as a result the target for this measure for 2014/15 is not available. We will seek to develop this in future budget exercises.
With respect to our development processes, we also ensure that we monitor costs across our projects to share good practice and maximise efficiency. The table below sets out build costs and HCA grant contributions for different types of schemes (2013/14 average).
Home Group Build Costs and Grant contribution 2013/14 Build cost (£) per
sq m
Grant funding (£) per sq m
Net build cost (£) per sq m % Grant funding contribution Land led 1,335 525 810 39% Package 1,882 408 1,474 22% Section 106 1,523 0 1,523 0%
Care and Support 2,673 1,249 1,424 47%
The average build costs provide insight which is useful in considering individual development proposals. However, it is not appropriate to simply compare the different types of schemes, as the average costs will reflect a range of factors:
• Land led schemes specifically exclude land cost, this is not always possible on Section 106 schemes or package schemes, depending on how the contract for development is structured.
• Our experience is that we have more Section 106 and package schemes in the South where development is more expensive. • Unusual or abnormal costs on particular developments can influence the average costs outlined above.
We are undertaking a review of build cost excluding land and abnormal costs which we will use for benchmarking purposes going forward and are in discussion with other Registered Providers on the best way to compare build costs and grant contributions of new builds.
Home Group is performing relatively well on most indicators in relation to targets. There are, however, areas for improvement, or that need further explanation.
With respect to voids, we recognise the need to significantly improve performance across the business. Missing our KPI target was partly due to under occupancy charge impact. Voids among our 1,429 garages (409 vacant as at June 2014) and decants into temporary accommodation while refurbishment/rebuilding took place also contributed to missing our targets. There were also voids across some of our supported accommodation assets, given the nature of short term client lets within parts of our supported accommodation. In some of our supported accommodation services, e.g. Bail Accommodation Support Services, we are contractually obliged to have a degree of flexibility and voids to enable us to be responsive to short notice demand.
Welfare Reform will continue to impact on voids and arrears (below), and so mitigation measures have been put in place. Actions being taken to reduce voids include: options appraisal on long term voids as part of the Asset Plan (see Section 5E); weekly voids reporting to enable speedy challenge and implementation of solutions (see Section 6A); and increasing our level of zero day void turnarounds (see Section 6H). The table below sets out targets for reduction of voids, bad debts and arrears for Customer Service going forward, and builds in capacity to meet the challenges of Welfare Reform. We will review these targets on an ongoing basis to ensure they are sufficiently challenging.
Our arrears figures are within target, but while Care and Support figures have decreased, Customer Service arrears figures have slightly increased on last year. In addition, benchmarking data (see Section 4B) highlights that this is an area we need to focus on in terms of improving performance relative to the wider sector. Performance has been impacted by Welfare Reform (40% of our units are three and four bedroom homes, so under occupancy charge has a significant impact), static debt (i.e. those in debt making minimal repayments), and a level of technical arrears, given that local authorities pay Housing Benefit on a four week cycle (one week in arrears). Significant activity is underway to reduce levels of arrears, with our Welfare Income Support Partners (WISPs), Customer Service Centre campaigns and supporting some low income customers to live in affordable rent properties through the Affordability Filter (see Sections 6F, 6D and 5H respectively).
Business Plan targets for Customer Service (General Needs) voids, bad debts and arrears
14/15 15/16 16/17 17/18 18/19
Voids % 1.5% 1.3% 1.2% 1.2% 1.1%
Bad Debts% 1.2% 1.4% 1.4% 1.3% 1.3%
Arrears % 5.0% 5.3% 5.5% 5.1% 4.9%
HouseMark VfM indicators (see Section 4) highlight relatively weak performance on total cost per property of responsive repairs and void works, and total cost per property of housing management. We will review all of our targets going forward to ensure that they are sufficiently stretching, including in this area with respect to maintenance and housing management. However, it is important to note that while our 2013/14 maintenance spend on social housing properties as a percentage of social housing letting income is actually higher than 2012/13, this reflects a positive capital investment to improve our customers and clients’ homes through the Home Investment Standard (exceeding Decent Homes Standard), and explains why our target is relatively high.
Both maintenance indicators are amber because we did not invest the level of resource originally planned and so need to increase investment in 2014/15 to ensure we are on track to roll out our Home Investment Standard (in 2013/14 we invested £11.3m in the Home Investment Standard). Implementation of the Home Investment Standard in conjunction with a roll out of planned maintenance and 100% stock surveys currently part way through completion will lead to improved quality homes for our customers and clients, as well as a reduction in responsive and emergency repair costs over the medium to longer term. Total maintenance as a percentage of housing income is anticipated to fall from 48.6% in 2014/15 to 39.6% in 2018/19 (see Section 3B). We do not, therefore, view this long term investment as an area for improvement, although will keep it under review and absolutely recognise that we need to reduce our responsive repairs figures.
There is a clear need for improvement in a number of areas, particularly when benchmarking data is taken into account. Our Improvement Plan included at the beginning of this document sets out our approach to driving forward efficiencies in these areas.
3E Procurement
Home Group’s Procurement policy is underpinned by the pursuit of Value for Money. Our VfM driven procurement activity includes the following:
• By ensuring we conduct transparent tender processes, advertising tender opportunities to the widest possible market (via the e-sourcing portal www.housingprocurement.com).
• Like all recipients of public funding, Home Group is obliged to follow EU Directive processes. By keeping legislative and best practice guidance at the heart of our Procurement governance, we are able to ensure that all stakeholders have confidence in our approach.
• We use flexible due diligence and risk management procedures (i.e. pre-qualification questionnaires) to ensure that we select the right supply chain partners from the outset. Where applicable, multi-supplier framework agreements including local providers are used. We also operate Regional Procurement Forums, providing a core database of local suppliers. • Home Group continually reviews and challenges spend activity, ensuring that contracts continue to deliver Value for Money. • We operate a group wide e-procurement system (Marketplace@home) for managing orders and ultimately spend. This
ensures that money is spent with the designated and negotiated lowest cost providers and within the correct delegated spend limits. Compliance across the top 300 suppliers sits at 97% across the business. All colleagues have signed up to this approach through the ‘i-comply’ e-learning system, and are held to account for delivering our procurement policy.
• We generate confidence in our procurement systems by engaging stakeholders in solution design and ensuring continued participation throughout the sourcing/selection and subsequent contract management phases.
• Home Group uses feedback mechanisms to ensure that we are achieving VfM. This includes but is not limited to: surveys/ questionnaires; colleague briefings; and face to face customer/client input.
• A key element in ensuring Value for Money through our supply chain partnerships comes through our flexible contract management methodology design to engage a diverse range of suppliers. The following examples support our ethos around adding social value:
• Economic/Financial Aid - e.g. SmarterBuys (http://www.smarterbuys.org.uk/home) an online store which helps our customers and clients buy the things they need for their homes – at affordable prices. Smarterbuys has been developed by the Northern Housing Consortium and is a not for profit initiative.
• Social sustainability - We take measures within our supply chain relationships to ensure that our partners deliver over and above the commercial requirement. Recent examples include a Procurement target to provide 70 apprenticeship places during 2013/14 within our maintenance contractor framework.
• We have chosen to demonstrate our commitment to delivering value through the transparency policy we adopt. One example is the decision we made in February 2011 to publish information about all costs over £500 on our website. We were the first Registered Provider to do publish this information.
• To provide external reassurance that Procurement are delivering Value for Money, Home Group has achieved CIPS accreditation for its policies and procedures and ISO9001 accreditation for application of robust quality management throughout the procurement process.
4. BENCHMARKING: HOW WE COMPARE WITH OTHER PROVIDERS AND LEARN FROM BEST PRACTICE 4A Overview of Home Group’s involvement in benchmarking
We recognise that we don’t operate in a vacuum and are keen to learn from what works, as well as to be best practice exemplars ourselves. For this reason, we benchmark against peers in a number of areas. This includes: benchmarking that we undertake annually against peer organisations’ financial statements, which forms the basis of a detailed Board report; Baker Tilly led back office benchmarking with a group of other RPs; and Care and Support benchmarking against a number of peers. Sections 9B and 10A also include benchmarking data (colleague costs and back office function costs respectively).
We undertake internal benchmarking to ensure consistency and share best practice around efficiency, e.g. measuring build costs for each development scheme. In addition, we benchmark ourselves against others to inform service design and delivery, for example around Procurement, Human Resources, Care and Support providers and customer/client involvement. We are members of HouseMark and provide and receive benchmarking data. We also participate in HouseMark benchmarking clubs around Welfare Reform impact and antisocial behaviour, and are considering joining Customer Contact Centre and Voids clubs to further increase awareness of peer activity and performance. In terms of our activity in Scotland, we are members of the Scottish Housing Best Value Network and participate in benchmarking as part of this network.
We also consider our performance against the sector average set out in the HCA published Global Accounts – a report goes annually to the Board which sets out where we sit in terms of relative performance with specific reference to the following areas: • performance;
• balance sheet position; • financial viability; and
• wider issues (including DHS and employees).
We recognise the need to improve our benchmarking activity and communication of this, and intend to expand the scope of it over the next year. For example, we are looking into benchmarking against private sector providers where possible. In addition, we are ‘buddying’ with Riverside Housing Association to share good practice between our organisations. Furthermore, Home Group’s Chief Executive is chairing a sub-group of a Department of Communities and Local Government/Registered Providers working group to identify a series of efficiency benchmarking indicators for the sector.
It is important to recognise that benchmarking performance against other organisations must be understood in the wider context of the goals of the organisation. A health warning must also be given around the benchmarking peers selected as comparators. Some of these may be self-selecting, and not particularly like each other (e.g. in terms of benchmarking clubs). Others will be chosen on the basis of geography or scale, but undoubtedly will have different areas of focus and priorities from each other. We are not comparing “apples with apples” as each organisation is unique, but it provides a useful proxy to understand performance across the sector. In addition, and arguably more importantly, it can open up opportunities to learn from those perceived to be excelling in certain areas, and that is where Home Group finds it particularly helpful.
Most of the benchmarking data we collate and commission is based on comparisons on 2012/13 returns (our own and other organisations). This is due to the time taken to collate and audit accounts, and then for external comparisons and validations to be made by HouseMark.
4B HouseMark 2012/13 benchmarking report
As with previous years, for the 2012/13 return, Home Group provided HouseMark with figures for our Customer Service activity in England, where data was available. Our Value for Money summary is as follows in comparison with other organisations – the peer group is determined by HouseMark and is not self-selecting, but generally represents larger RPs within the HouseMark dataset. We recognise that this identifies room for improvement in some areas, including in data collection, and we are working with HouseMark to address this in future years, as well as ensuring our Care and Support arm and Home Scotland are captured within the figures where possible. A summary of performance provided by HouseMark is included below. Where data is unavailable, it is due to Home Group collecting data using a different methodology to that employed by HouseMark (primarily around collection of customer satisfaction data). The business will review whether to change methodology around collecting satisfaction data, but we believe that there is merit in ensuring consistency over time, particularly with respect to the operation of the relatively new Customer Service Centre.
HouseMark Scenario Benchmarking report 2012/13 (published Feb 2014): Value for Money
Note: CPP is Cost per Property
HouseMark’s benchmarking of VfM figures for Customer Services functions in England (above) demonstrates areas of strength to build upon in some areas (green) and areas for improvement in future years (red and red/amber). Our Improvement Plan sets out how we plan to drive up performance in future years.
