Value for Money Self Assessment 2014-15
Value for Money Self Assessment 2014-15
Contents
Page
1. Context ............................................................................................................................. 2
2. Approach to VFM ............................................................................................................. 2
3. The Government's Summer Budget 2015 ........................................................................ 3
4. Progress since last year ................................................................................................... 3
5. VFM in decision making ................................................................................................... 5
6. Corporate Plan 2013-16 ................................................................................................... 5
7. Overview of Group strategies ........................................................................................... 5
7.1 Corporate Strategy: Asset Management (including Asset Maximisation) ................ 6
7.2 Corporate Strategy: Business Growth ..................................................................... 8
7.3 Corporate Strategy: Neighbourhoods ..................................................................... 9
7.4 Corporate Strategy: Independent Living ............................................................... 10
7.5 Corporate Strategy: Financial Health and Business Assurance ............................ 11
7.6 Corporate Strategy: Social Investment ................................................................. 15
7.7 Corporate Strategy: People................................................................................... 15
7.8 Corporate Strategy: Customer Access and Insight ............................................... 16
8. Benchmarked VFM performance and scrutiny ............................................................... 17
9. Conclusion...................................................................................................................... 20
Value for Money Self Assessment 2014-15
1. Context
Futures Housing Group (“the Group”) undertakes an annual Value for Money (“VFM”) Self
Assessment to evaluate its financial, social and environmental performance. It uses targets
to drive VFM. Performance against these targets enables stakeholders to determine how
the Group delivers VFM.
The Group is committed to delivering VFM and this self assessment demonstrates
compliance with the VFM Standard set out in the Regulatory Standards for registered
providers of social housing. This also details how the Board has gained assurance over
compliance with the VFM Standard, progress against areas identified for improvement in
last year’s VFM self assessment and additional areas where the Board wishes to further
enhance VFM. The Group’s website includes a summary of compliance against the VFM
Standard (www.futureshg.co.uk/about-us).
The Board recognises that there are some areas where the business is operating outside of
target. In addition, the Government’s Summer Budget 2015 is likely to have an ongoing
impact on some of the Group’s future value for money initiatives. Further details of this are
contained within this self assessment.
To enable transparency and accessibility, further publications on VFM have been provided
to the Group’s stakeholders including a separate VFM document for the Group’s tenants.
These publications can be found on the Group’s website www.futureshg.co.uk/about-us.
Contact with and scrutiny by tenants continues through the year via Tenant Scrutiny panels.
These provide feedback on services and desired improvements, which inform Board
decisions and help shape the Group’s three year Corporate Plan and its eight strategies
(“the Plan”).
2. Approach to VFM
General approach
VFM is an ongoing process within the Group’s systems and culture. There is a clear track
record of driving cost reduction and improved performance whilst generating savings for reinvestment.
What VFM means for the Group
Strategically, the Group’s VFM target continues to be directly linked to its vision of being a
strong, forward thinking regional housing group with its heart in the community. To deliver
this, the Group’s VFM Strategy has the aim of achieving economy, efficiency and
effectiveness across all Group operations.
VFM Strategy
The Group introduced a VFM Strategy in 2012/13 which was revised in January 2015. The
VFM Strategy addresses how the Group intends to continue meeting the requirements of
the HCA’s VFM Standard. The overarching aim of the VFM Strategy is to have upper
quartile performance with costs at no more than the median level. Where this aim is not
being met, the VFM Strategy requires an action plan to move an area into upper quartile or
to articulate, through the VFM Self Assessment, why the Board has taken a strategic
decision to either invest in an area or not seek upper quartile performance.
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Value for Money Self Assessment 2014-15
The Group has a demonstrable track record in focussing on and delivering VFM across all
operational areas and can demonstrate that VFM is embedded within its business
culture. The Board recognises that VFM needs to be assessed continually and the Group’s
operations adapted to enable continued VFM delivery. To monitor this, various measures
exist to enable the Board to assess VFM during the year and track the overall direction of
travel. These include:
 monitoring delivery of the Plan and its associated eight key strategies;
 inclusion of VFM in every report considered by the Board;
 the Group Audit Committee having the role of VFM Champion in overseeing delivery
against the VFM Standard and reporting back to the Board;
 the assessment and monitoring of a suite of key performance indicators (“KPIs”) to track
service delivery and VFM; and
 quarterly VFM progress updates shared via the Group’s website.
As a mature LSVT, with a consistent track record in delivering efficiencies, the ability to gain
further savings through cost reduction is now limited, however robust cost control and
reduction continues. The VFM Strategy now strives for efficiencies throughout the year
using innovation in procurement, service transformation and organisational change. For
example, to manage increasing repair costs, maintain service levels and further enhance its
ethos of being a community based housing association, the Group has developed an
innovative procurement solution. Under this solution, the Group benefits from long term
preferential rates for materials and a supplier rebate, with local contractors undertaking
asset management works. Savings from local contractors under the planned repairs
framework totalled £833k across the first three years, with £238k (28.6%) being realised in
2014-15 from CPI savings and material savings.
The Group has commenced its ‘How we work’ project. This project will utilise innovative
methodologies to eliminate inefficiencies across the Group. The initial phase of this work is
focussed on delivering a better customer experience. Initial VFM targets have been set
which are included in the target gains detailed at section 7.5. Further efficiency savings are
expected to be identified through the ‘How we work’ project. Targets for these are presently
being set and will be incorporated into next year’s VFM Self Assessment.
3. The Government's Summer Budget 2015
In July 2015, the newly elected Government, through the Chancellor of the Exchequer,
delivered its Summer Budget which introduced significant challenges for the sector. These
challenges included further reductions in welfare benefits such as a lowering of the benefit
cap to £20k, a four year freeze on working age benefits and limiting child tax credits to two
children. Other challenges include the extension of the National Living Wage, the
introduction of ‘Pay to Stay’ for households with income in excess of £30k and a 1%
reduction in rents from 2016/17 over the next four years.
The Board has set an initial efficiency target of £600k per annum across the Group. This in
conjunction with a revised budget enables the Group to comfortably respond to the Summer
Budget 2015 whilst maintaining its development programme. As above, further efficiency
savings will be identified through the ‘How we work’ project.
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Value for Money Self Assessment 2014-15
4. Progress since last year
The Group had identified several areas where VFM could be further enhanced. Some of
these have been actioned during 2014/15 whilst others are expected to continue into future
years. Details of these are summarised in the table below, with details of monetary
efficiency gains being set out under the Financial Health and Business Assurance section.
Key VFM actions identified
in prior year
Progress to date
Governance: Set up a Governance Task
and Finish Group to assess the most
appropriate governance structure in order
to deliver business objectives and
maximise efficiencies for the future.
Complete: The Governance Task and Finish Group have successfully
implemented a new Governance structure, including a coterminous Board,
which was implemented in July 2015.
The new Board has a
complementary skill set that meets the needs of the Group in delivering
the Plan.
Customer offer:
The Board were
exploring how to enhance VFM in the
customer offer, considering the Group's
current and future customers, what
services customers would like, what an
acceptable standard of service is, what
competitors are offering customers and
what the cost differential is between
offering a service which complies with legal
and regulatory standards as a minimum
and a value added service.
Ongoing: The Board has established the Group’s customer offer. This
includes the quality of existing homes, the volume of new homes
development, the level of tenancy management and community
investment. Work is ongoing to realign current investment levels to those
required by the Board. For example, additional finance has already been
secured to deliver the Board’s new build requirements but the enlarged
programme is yet to commence.
Other completed actions include the introduction of self service options for
tenants via the Group’s website; for example being able to manage their
own account and to book repairs.
The customer offer workstream has been further enhanced during 2014/15
through planned implementation of a unified communications platform.
This will enable a multi-channel contact centre and call recording (for
customer services). It is intended to reduce costs relating to call handling,
travel and maintenance. This workstream will continue into 2015/16 and is
expected to generate £127k savings over 5 years.
Health and housing: The Board will
consider the extent to which the Group
should play a role in health care and
support and determine what level of risk /
reward would be acceptable.
Complete: During the year, the Board has examined the opportunities
available in support and health care, the associated risks and the financial
returns. The Board decided not to invest in care but to continue to invest
in low level support.
Tenure diversification: The Board will
provide a range of tenancy types based on
a mixed development model, providing a
balanced portfolio of housing tenure where
social rent, open market rent, open market
sale and shared ownership units are all
developed.
Ongoing: The Board has made significant progress in this area. The first
mixed tenure development sites have been appraised and approved by
the Diversification Task and Finish group and will begin on site during
2015/16, with delivery planned in 2016/17. Funds from refinancing will be
used to enter into new commitments for a mixed tenure development
programme, which is expected to reach c. 300 units per annum by
2016/17.
This diversification model is designed to
generate surpluses to further the Group’s
objective of delivering social housing.
How we work: The Board will review its
operating structure to ensure it is
appropriate for current and future needs.
In developing this, it will assess the impact
of new technology, current and future
working practices, location and type of
office accommodation, whether further
efficiencies can be obtained and what
funds are available so the Group can
determine the balance between providing
new homes and/or a social return on
investment.
Ongoing: The Group has completed scoping on a change (continuous
improvement) project. This will be implemented over the next three years
and incorporate the existing transformation programme.
Financing the Group: The Board will
identify the most appropriate mechanism
for obtaining additional funds to support
Complete: The refinance within the Group is continuing with funds
expected to be available from the end of 2015.
The Board approved a £270k investment to implement an electronic
document management system. This project is expected to generate a
£279k return during the first full year of implementation through cost
reduction in relation to staff time, storage, photocopying and stationary.
A review of office accommodation is ongoing. This will incorporate the use
of mobile working technology and the associated reduction in office
accommodation needs.
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Value for Money Self Assessment 2014-15
Key VFM actions identified
in prior year
Progress to date
growth plans.
Asset Performance - Return on assets:
Integrate the asset performance evaluation
tool and use it to inform investment
decisions.
Ongoing: This tool was implemented during the year. More information
on how the system will be used to inform decision making is detailed under
the Asset Management strategy section.
The Group has recognised that it can improve the clarity with which progress against VFM
actions is articulated within the VFM Self Assessment. Consequently, this VFM Self
Assessment highlights future actions and we will reflect on these in subsequent years.
5. VFM in decision making
VFM is embedded in decisions across the Group. At high level, the Board undertakes an
annual review of the Group’s strategic direction and the performance against delivering the
three year Plan after taking account of the requirements and expectations of key
stakeholders, including tenants.
The Board’s review includes the allocation of available funds to deliver the Plan. The Plan
is communicated to stakeholders and team members and is also available on the Group’s
website (www.futureshg.co.uk/about-us).
Tactical and operational decisions also consider VFM, through a robust internal control
framework. For example, this requires staff to assess and document VFM when procuring
goods and services.
6. Corporate Plan 2013-16
The Group is now at the end of the second year of its three year Plan. The Plan outlines
the following eight key strategies, each of which has continued to demonstrate delivery of
the Board’s objectives and a track record of exceeding targets and generating savings:

Asset Management

Financial Health and Business Assurance

Business Growth

Social Investment

Neighbourhoods

People

Independent Living

Customer Access and Insight
The Plan has been updated for 2015/16 and achievement against revised strategic aims
will be considered in preparing the VFM Self Assessment 2015/16.
7. Overview of Group strategies
This section provides a VFM self assessment in relation to each of the eight corporate
strategies that deliver the Plan. Each self assessment is based on a combination of
performance, financial and benchmark data and the following ratings:

Performance significantly out of target

Performance not meeting target

Performance at or above target
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Value for Money Self Assessment 2014-15
A balanced scorecard suite of KPIs has been developed and these KPIs are detailed in
section 8.
Detailed under each corporate strategy below are future plans to further enhance
VFM. These are embedded into a VFM Action Plan that includes timescales for
delivery. This Action Plan can be found on the Group’s website.
7.1 Corporate Strategy: Asset Management (including Asset Maximisation)
Key targets
 Maintain the quality of properties in line with the 30 year asset plan.
 Implement an active asset management strategy and a unit by unit comprehensive
performance evaluation tool to support investment decisions.
 Deliver measurable VFM, adopting a holistic approach to asset management inclusive of
the immediate surrounding environment and utilising energy efficient technologies and
‘green’ deals.
Performance 2014/15
The Group has invested £16.3m in its homes, in line with the 30 year asset plan.

The Group has implemented an Asset Performance Evaluation tool (“APE”) to drive its
Active Asset Management Strategy.

DDH has not met its target of 90% repairs satisfaction.

Completion of Environmental Standard BS8555. This included vehicle fleet replacement,
with £137k fuel efficiency saving and carbon reduction (125 tonnes).

The Board has approved a £375k investment to replace communal door systems at
properties with a communal entrance, improving the safety and security of tenants.

Return on assets
Properties continue to generate a healthy return on investment, averaging 27.9% before
major, planned and void works and 20.6% after. The majority of homes generate returns
between 20% and 50%. The return on a property by property basis is known with the
number of homes generating an in-year loss remaining low at 85. Whilst these measures
indicate strong asset management performance, they are not used in decision making on
future asset use. Instead, decisions consider a combination of asset sustainability
and net present value (“NPV”) and this is now embedded in the Active Asset Management
strategy.
Active Asset Management strategy
During the year an Active Asset Management system (‘APE’) was implemented. This
performs an NPV calculation on a unit by unit basis, taking into account the next 30 years
income and expenditure per unit, including management and repairs costs.
In addition to the NPV, the APE system has attributed sustainability scores to each property
based on various measures shown below:
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Value for Money Self Assessment 2014-15
Sustainability
measure
Indicators
Income
Rent arrears / SAP rating and Heating type (as an indicator of fuel poverty)
Housing
Management
Anti-social behaviour (‘ASB’) levels / Data from Indices of Multiple Deprivation on levels of crime /
Distance from managing office
Demand
Resident satisfaction / Turnover rates / Access to local facilities & amenities / Waiting list &
demand / Garage availability / open space / Development potential / Community feeling
APE output is shown below. Each ‘bubble’ on the graph represents an asset Group, with
the size of the bubble determined by the amount of stock in the asset Group. The
horizontal scale sets out the 30 year NPV of the asset groups and the vertical scale shows
the “sustainability rank”.
BACK TO MENU
Asset Group by Company
BACK TO INDEX
NPV per Unit by Sustainability Index (Bubble size - No. of Units)
3.00
POOR NPV
POOR NPV
GOOD SUSTAINABILITY
GOODNPV
NPV
GOOD
GOOD SUSTAINABILITY
GOOD SUSTAINABILITY
GOOD SUSTAINABILITY
2.00
1.00
(£10,000)
£0
£10,000
£20,000
0.00
£30,000
£40,000
£50,000
£60,000
-1.00
-2.00
-3.00
POOR NPV
POOR SUSTAINABILITY
POOR NPV
GOOD NPV
POOR SUSTAINABILITY
GOOD NPV
-4.00
The chart highlights that
all of the Group’s
properties
have
a
positive NPV over 30
years, with most stock
having an NPV of £25k
or more.
This is
indicative
of
strong
financial performance.
Most of the asset groups
cluster
towards
the
centre of the chart,
indicating
consistent
performance.
POOR SUSTAINABILITY
POOR SUSTAINABILITY
The strategic action that the Group may take will depend on where each property type is
populated within the APE model. These considerations are detailed below. Each property
will however be reviewed individually with any decision to invest or dispose being made
after a detailed assessment.
Strategic considerations
GOOD NPV
GOOD SUSTAINABILITY
POOR NPV
GOOD SUSTAINABILITY
GOOD NPV
POOR SUSTAINABILITY
POOR NPV
POOR SUSTAINABILITY
Asset retention to support future business growth or asset disposal if the market
value is high enough to generate additional business growth.
Possible investment in assets to improve NPV or asset disposal if investment would
not improve NPV.
Possible community investment to improve the desirability of the location and the
Group’s ability to deliver sustainable communities or asset disposal if investment is
not economically viable.
Possible asset disposal as demand may be low or investment in the asset and
community / neighbourhood if economically viable.
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Value for Money Self Assessment 2014-15
A cross-Group panel is now focussing on the asset Groups falling into the “poor NPV and
poor sustainability category”, starting with sheltered housing properties. These options will
be fully reviewed and evaluations will be considered by this panel with recommendations
being made to a new Investment Committee, due to be set up during 2015.
Analysis has already been made on 10 DDH homes as these have a poor NPV due to high
maintenance costs. When these homes become void, they will be sold and the proceeds
invested in new homes growth.
The Group has invested c. £16m into its asset base
during the year, with return on investment between 20%
and 50%. The APE system has been implemented to
support the Group’s Active Asset Management
strategy. This considers asset sustainability and NPV
to inform decision making around future asset
investment. Environmental and social investments and
efficiencies have also been made.
VFM self assessment
Satisfaction with repairs has been lower than target.
Future plans exist to improve satisfaction levels.
Future plans
 Invest a further £39m over the next 3 years in maintaining and improving homes.
 Continue to embed the APE system to identify opportunities for asset investment or
disposal and to use surpluses to subsidise business growth.
 The Group has started a transformation review of its repairs service. This focusses on
the end to end customer process and is using lean techniques to identify and remove
waste, deliver process efficiency and improve customer satifaction.
 Progress environmental improvements to achieve the ISO 14001 standard. This will help
the Group to demonstrate its commitment to reducing its carbon footprint.
7.2 Corporate Strategy: Business Growth
Key targets
 Invest £80m into building 968 new homes over the next 4 years. This will be funded
through existing and new loan facilities and surpluses generated through active asset
management and diversified tenures.
 Extend new home tenure offer to include open market rents and sale and use surpluses
generated to drive down the average cost per new affordable home.
 Increase the supply of affordable homes through private sector leasing ("PSL”).
 Further develop delivery of social enterprises, training and education for communities.
Performance 2014/15
158 PSL units are now in management, an increase of 68 during the year.

The Group completed 69 new homes in 2014/15 and entered into commitments to
deliver a further 206 starts on site in 2015/16 (DDH x24 / FHL x182). Investment in
new homes is under target due to ongoing planning approval negotiations. To address
this, the Group has restructured its development team to support the 4 year

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Value for Money Self Assessment 2014-15
development programme.
Of 206 starts on site planned for 2015/16, 27 (13%) relate to open market sale.

The average cost of a new build unit (net of grant and sales receipts) has reduced from
£96k to £86k.

The Group operates 13 in-house traineeships / apprenticeships.

The Group owns a 1/3 share in associate company Access Training which has
delivered apprenticeships, work based and classroom learning to 703 candidates.

Investment in new homes is currently performing
under budget and therefore impacting on
financial and environmental performance. The
Group has restructed its development team to
drive the enlarged development programme over
the next 4 years.
VFM self assessment
Future plans
 Set up an Investment Committee to consider all future investment decisions.
 The Group has joined a development benchmarking club. An annual report will be
available next year which will allow a comparison of costs and an assessment of whether
the Group’s development costs are in line with median.
7.3 Corporate Strategy: Neighbourhoods
Key targets
 Provide clear guidance and proactive support over rent payment and money advice.
 The adoption of a firm and supportive approach to Anti-Social Behaviour (“ASB”) and
Tenancy Management.
 Create cleaner, safer, greener neighbourhoods.
 Deliver a clear and transparent tenancy offer relating to tenure type and lettings policy.
Performance 2014/15
The Group has invested into its Money Advice Service to deliver financial advice to
tenants, including debt management, welfare and benefits advice. This includes 809
money advice referrals, increasing disposable income for tenants (£0.56m), £79k
additional benefits claimed (e.g. through DHP) and £51k reduction in rent arrears.

The Group has applied a RESPECT Charter for ASB cases which has involved a multiagency approach to tackling ASB, improved outcomes for victims and an increased
number of ASB cases resolved out of court (<5 ASB cases resulted in eviction orders
in 2014/15). This has helped contribute to minimising eviction and court costs.

Efficient management of stock and tenancies through a combination of settling in and
annual tenancy visits. The Group visited 98.5% of all new tenants within 6 weeks of
tenancy start and completed 360 annual tenancy visits during 2014/15. These

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Value for Money Self Assessment 2014-15
measures have resulted in early intervention of tenancy issues and the proactive
identification of rechargeable repairs.
The Group has utilised its ground maintenance social enterprise business (Futures
Greenscape) to improve the cleanliness and safety of its neighbourhoods. This has
resulted in an overall increase in customer satisfaction with neighbourhoods.

Tenancy Management and Rent Arrears and Collection Costs remain out of target.

The Group has invested in the cleanliness and
safety of its neighbourhoods through its social
enterprise company Futures Greenscape.
Welfare Reform continues to be one of the
highest strategic risks facing the business with
social investment into the Group’s Money
Advice Service helping to mitigate the impact.
Tenancy management and rental costs exceed
median levels.
VFM self assessment
Future plans
 The Group will review tenancy management services as part of its wider transformation
programme to increase customer satisfaction and reduce cost.
 Attract more people and re-let homes quicker by improving public perception of our offer
through better marketing and communications.
 Improve our payment and collection process to maximise income by effectively preparing
for and communicating the potential impact of Universal Credit.
7.4 Corporate Strategy: Independent Living
Key targets
 Maximise external funding.
 Ensure that all care and support services are financially self sufficient.
 Market our services and develop new approaches for support delivery.
Performance 2014/15
The Group has restructured services at DDH in response to external funding cuts and
to ensure a self sufficient service. A financially independent Footcare at Home
Service has been introduced at FHL, with break-even achieved in year one of
operation. FHL was also a national award finalist - Support Provider of the Year for
Footcare at Home Service (24Housing).

Neighbourhood Support Co-ordinator visits provide various value added services
including c. 2,700 falls risk assessments per annum (with clinic referrals), c.1,350
malnutrition assessments per annum, c.1,350 bowel screenings per annum and c.
4,000 basic benefit assessments per annum. These services have helped to achieve
strong Quality Assurance Framework (“QAF”) grades.

The QAF 2013 for FHL Housing Related Support Service resulted in 21 out of 22
(95%) indicators being awarded grade A by Derbyshire County Council.

During 2014/15 Independent Living implemented mobile working and completed
8,758 electronic forms reducing paper usage and costs.

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Value for Money Self Assessment 2014-15
The Group has restructured some elements of
its Independent Living service in response to
external funding cuts and invested in
Neighbourhood Support Co-ordinator visits. It
has achieved high QAF grades and reduced
paper wastage through process automation.
VFM self assessment
Future plans
 Support the health and well-being of customers by working in partnership with other
sectors including health and government.
 Ensure our services are competitive and meet customers’ future needs.
7.5 Corporate Strategy: Financial Health and Business Assurance
Key targets
 Identify and deliver financial gains through income maximisation and cost control
mechanisms to enable additional investment within the business.
 Identify and deliver efficiency / VFM savings through cross-Group procurement activity.
 No front line service areas (as defined by Housemark) to have direct cost per property
and performance in lower quartile.
 Maintain efficient and effective assurance mechanisms over Group governance.
Performance 2014/15
The Group has made financial gains of £4.5m against a target of £1.3m. This
includes procurement cost savings of £1.3m and gains through favourable rent
increases, property sales and effective management of voids and rent arrears.

The Procurement Team were highly commended in the Government Opportunities
Contract Management Initiative of the Year Award in February 2015. This recognises
excellence in public procurement, in particular management of partnering framework
contract which has enhanced the Group’s reputation.

Six out of eight front line service areas in FHL and DDH are at target for direct cost
per property (2013: 6 out of 8). Presently, rent arrears and tenancy management are
outside of target due to investment in these areas. No front line services have cost
and performance in the lower quartile.

The Group has implemented the first phase of a new Governance structure,
transitioning from multiple Boards to one coterminous Board. This new structure is
expected to reduce Board meeting costs and staff time in servicing Boards.

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Value for Money Self Assessment 2014-15
Past and future gains:
The table below shows key business plan gains achieved over the past two years:
Previous gains achieved
New target gains/losses
2013/14
target
£000
2013/14
actual
£000
2014/15
target
£000
2014/15
actual
£000
2015/16
target
£000
2016/17
target
£000
2017/18
target £000
Income & sales
increases
2,030
3,749
1,211
3,170
2,414
3,527
(3,147)
Cost savings &
efficiencies
75
516
115
1,306
1,155
1,166
1,177
(30)
(30)
4
16
152
147
144
2,075
4,235
1,330
4,492
3,721
4,840
(1,826)
FHG –
gains/losses
Gains/(losses)
from leasing
activity
Net gains/(losses)
Gains are expected over the next two years, primarily through property sales. The target
gains/losses incorporate the impact of the statutory rent reduction and other changes
announced in the summer budget 2015. The Board has set revised efficiency targets for
the Group which are included in the table above. In addition the Board has instigated a
comprehensive cost structure review. The efficiency targets arising from this review will be
embedded into next years VFM assessment. Through effective financial management of
the Group’s business plans, capacity is available within existing facilities to increase
borrowings so that the Group can continue to invest in strategic projects and new homes as
previously planned prior to the summer budget 2015. Planned future investments are
shown in the next section.
Future plans for gains made
Previous investments
New investments
2013/14
target
£000
2013/14
actual
£000
2014/15
target
£000
2014/15
actual
£000
2015/16
target
£000
2016/17
target
£000
2017/18
target
£000
Strategic projects *
3,565
1,982
4,468
2,909
2,487
945
737
New homes *
14,929
11,324
13,415
6,785
14,518
10,977
11,359
Total
18,494
13,306
17,883
9,694
17,005
11,922
12,096
Gains made
2,075
4,235
1,330
4,492
3,121
4,240
-
Loan drawdowns
16,419
9,071
16,553
5,202
13,884
7,682
12,096
Total
18,494
13,306
17,883
9,694
17,005
11,922
12,096
FHG
Investments made
Funded by
* Details of under investment in new homes are set out under the Business Growth Strategy. Planned investments not
fully achieved in 2013/14 and 2014/15 have been rolled forward into subsequent years.
12
Value for Money Self Assessment 2014-15
The table below highlights some key projects where the Group is re-investing gains made.
Investment
Financial
Environmental
Social
Unified Communications: The Group’s internal communications and contact with customers is heavily dependent on
telephone and face to face to face contact. The project’s objectives are to implement unified communications, a multichannel contact centre and call recording (for customer services).
£880k
 Reduced travel costs
 Reduced contact handling
costs
 Lower maintenance costs
 Reduced costs for customers
 Ease of access to services
for customers
 Carbon reduction
FHG Apprenticeship Programme: An annual programme to provide apprenticeships and training opportunities
throughout the Group.
£535k
 Investment in staff
 Investment in Futures
Greenscape
 Skills training
 Re-employment cases
Electronic Document Management: Implementation of a new ICT system to improve and automate the flow of
information around the business.
£270k
 Enhanced processing speed
 Reduction in staff time
 £279k saving planned for first
year.
 Carbon reduction
 Quicker resolution of
customer enquiries
Front line services (absolute costs)
When assessing VFM, performance is reviewed alongside cost. The tables below show a
summary of “Housemark” current and previous year’s benchmarked costs for frontline
services, compared against a peer group of 33 other Midlands based LSVTs, chosen for
their comparability in terms of size, geographical location and age.
The table shows direct costs per unit across frontline services, where ‘Q’ relates to quartile
performance.
FHL - front line service absolute costs
£ Direct
cost
per unit
2014
Frontline services
£ Direct
cost
per unit
2013
Target
met
£ Direct
cost
per unit
2012
Target
met
Target
met
Responsive repairs and
void works
Q1
503

Q1
481

Q2
552

Major repairs and cyclical
maintenance
Q1
1,082

Q1
872

Q1
1,014

Rent arrears & collection*
Q3
73

Q1
56

Q1
51

Anti-social behaviour
Q2
31

Q3
31

Q3
35

Lettings
Q1
22

Q1
16

Q1
18

Tenancy Management*
Q3
54

Q3
58

Q2
44

Resident involvement
Q2
33

Q1
29

Q1
27

Estates services
Q1
70

Q1
64

Q2
93

* As detailed in the Neighbourhoods Strategy (7.3), whilst these costs are above median, future plans exist to lower costs.
13
Value for Money Self Assessment 2014-15
DDH - front line service absolute costs
Frontline services:
£ Direct
cost
per unit
2014
Target
met
£ Direct
cost
per unit
2013
£ Direct
cost
per unit
2012
Target
met
Target
met
Responsive & void
repairs
Q2
552

Q1
487

Q1
425

Major & cyclical repairs *
Q4
2,171

Q4
2,462

Q4
3,182

Rent arrears &
collection**
Q4
97

Q4
79

Q4
73

Anti-social behaviour
Q1
14

Q1
15

Q1
5

Lettings *
Q3
33

Q3
30

Q4
43

Tenancy Management**
Q3
64

Q4
86

Q4
82

Resident involvement
Q2
38

Q1
33

Q3
45

Estates services
Q2
98

Q1
78

Q2
103

* Whilst direct cost per unit is below median, this was expected due to planned investment in these areas.
** As detailed in the Neighbourhoods Strategy (7.3), whilst these costs are above median, future plans exist to lower costs.
Benchmarking - Back office costs
The Group benchmarks its back office costs using Baker Tilly. This demonstrates that cost
per unit is £568 compared to the median of £582 (£126,980 under median cost).
Significant financial gains have been made
enabling the Group to invest in social and
environmental priorities.
VFM self assessment
Future plans
 Continue to respond proactively to the Welfare Reform changes.
 Utilise the Group’s funds to deliver business growth plans and tenure diversification.
 Commence a business transformation programme which is customer-focussed and
improves efficiency.
 Complete implementation of a new Governance structure which moves the business
from multiple Boards to one coterminous Board and reduces meeting costs and time in
servicing Boards.
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Value for Money Self Assessment 2014-15
7.6 Corporate Strategy: Social Investment
Key targets
 Assess the impact and value currently delivered in our communities.
 Establish the Group’s CSR approach and embed it in our operational services.
 Generate a social return on investment of £342k.
Performance 2014/15
The Group has developed guidelines in relation to health, wellbeing and employability
in support of its Corporate Social Responsibility agenda.

The Group has chosen to target social investment activities around employability and
health. This is linked to and reported under the People Strategy.

Three young people from the local community have achieved apprenticeships
through Futures Greenscape. Of the Group’s 37 previous seasonal workers, 70%
have secured employment (38% in a permanent role with Futures Greenscape
Limited and the remainder in employment elsewhere).

The Group used the Housing Associations Charitable Trust (“HACT”) framework to
measure social investment activity. At FHL, the full HACT social value toolkit has
been used to evaluate the ‘Family Support’ programme, providing a social return on
investment of £444k. The toolkit has also been used to evaluate the social impact of
DDH’s volunteering programme, generating a social return on investment of £158k.

The Group has made various investments
including health and employability programmes
and local apprenticeships.
VFM self assessment
Where appropriate, the Group has also applied
the HACT model to understand its social return
on investment.
Future plans
 The Group will continue to utilise HACT where appropriate and other relevant measures
for assessing social value and supporting delivery of employability, health and well being.
7.7 Corporate Strategy: People
Key targets
 Provide employment and development opportunities within the Group and in the wider
communities that the Group serves with initiatives to assist in addressing employability.
 Ensure that people systems, processes and practices enable effective performance.
 Ensure that the Group’s commitment to people is responsive to external changes and
encourages sustained levels of high performance and contribution.
15
Value for Money Self Assessment 2014-15
Performance 2014/15
Our annual engagement score highlights high team member satisfaction (88%).

Electronic document management eliminating paper files.

64 new employees have joined the Group of which 63% live in local communities.

The Group employed 4 new apprentices and 2 new trainees in 2014/15. In addition, 8
apprentices and 2 trainees completed their training in the year, with 9 securing full time
employment and 1 pursuing further education.

The Group provided 47 work placements to students from schools, colleges and
universities and for local job seekers through the Job Centre.

Ten professional qualifications achieved through company sponsored training.

The Group has invested in its workforce,
through a combination of local recruitment,
apprenticeships, work placements, training and
sponsorship.
VFM self assessment
A reduction in paper based working has helped
to support environmental improvement.
Future plans
 The Group is piloting the ‘6th generation’ of the Investors In People (IIP) framework and
assessment process. The aim is to work towards Gold.
 The Group is looking to recruit 4 graduates during 2015/16.
 Continue to invest in the training and development of team members.
 Support our communities with opportunities for training and development through our
training partner Access Training.
7.8 Corporate Strategy: Customer Access and Insight
Key targets
 Establish a range of modern communication and interaction channels based on customer
preference and insight.
 Provide a range of mechanisms for direct customer involvement, influence and scrutiny.
Performance 2014/15
Four new websites were launched for the parent and subsidiary companies during
2014/15 to improve customer experience and signposting to on-line services and
deliver consistency in website communication.

The Group has rebranded ‘Your Account’ which is a self service website for customers.
It provides them with improved access to the Group’s services including viewing their
rent account, paying rent, requesting repairs and updating their contact details.
Registration levels have increased.

16
Value for Money Self Assessment 2014-15
Provision of an 0300 telephone line at DDH to streamline multiple call options to a
single telephone number. This offers customers local call charges for landline and
mobile calls rather than variable rates to non-geographic numbers (e.g. 0800 numbers
which incurred a charge when dialled from mobiles).

The Group has implemented Orchard Customer Dashboard (Customer Relationship
Management) which has been used to improve data integrity to enable informed
targeting of services and improved customer satisfaction.

Establishment of Insight Committees who will focus on tenants’ interests.

The Unified Communications project which will
offer multiple communication channels for
tenants has been deferred to 2015/16.
Consequently, the social and environmental
VFM assessment is graded as amber.
VFM self assessment
Future plans
 Roll out of a unified communications platform to deliver business efficiencies for the
benefit of tenants, employees and other stakeholders and to offer improved choice and
satisfaction for customers.
 Development of a mobile app to enable further roll out of Your Account to customers via
mobile and tablet devices.
8. Benchmarked VFM performance and scrutiny
Managing Performance
At the heart of the Group’s VFM Strategy, is the desire to manage resources economically,
efficiently and effectively. To enable this, the Group has implemented a robust performance
management and scrutiny framework in recognition of the importance of performance
information in driving efficiencies and VFM. This has helped the Group achieve strong
levels of performance over several years.
The performance management systems provide specific information sets referred to as
‘balanced scorecards’. These are designed to match user requirements. For example, the
Board receives data to enable them to monitor delivery of the Plan and team members
receive information to enable them to monitor and improve their particular area of work.
With costs and quality, performance is benchmarked against other organisations using
statistics from external organisations such as Housemark and Baker Tilly.
The tables below set out some examples of how the Group has achieved sustained VFM.
These examples are monitored during the year by the Board and have a direct correlation
to the Group’s Plan and key strategies.
17
Value for Money Self Assessment 2014-15
FHL Performance 2014/15:
Upper quartile /
future target *
2014/15
Target
2014/15
Actual
Target
met
2013/14
Target
2013/14
Actual
2012/13
Target
2012/13
Actual
% of jobs completed right first time
91
91
91.7

87
91.1
87
88.3
% of tenants satisfied with the
most recent repair
90
90
92.6

2,444
2,674
1,585

2,539
1,641
54
65
52

68
97
27
27
26.7

Indicator
Asset Management
Cost per property of Asset
Management (£)
Not reported in previous years
Not reported in this
year
Business Growth
New homes developed**
66
63
Neighbourhoods
Average time to re-let properties
(days)
Previous years’ reporting was based on the
CORE definition (i.e. re-let taken from major
works completion to re-let).
Performance for 2014/15 reflects the full
void period.
20
19
20
18
91.8
85
91.4

91.1
90.9
91.1
88.4
% of sheltered units occupied
95
95
99.1

95
99.5
95
98.6
% of tenants in sheltered schemes
satisfied with the overall service
provided
90
90
98.4

90
83.5
90
93.2
1.58
2
0.78

2
1
1.5
1
0
0
0

91.8
85
95.3

<8
<8
2

85
85
93.3

% of tenants satisfied with their
neighbourhood as a place to live
Independent Living
Financial Health and Business Assurance
Current rent arrears as % of rent
due
Number of service areas achieving
high cost and low performance,
based on annual Housemark
benchmarking activity
Not reported in previous years
Customer Access and Insight
% of tenants satisfied with overall
service
Number of complaints escalated to
stage 3
85
90.1
85
89.8
Not reported in previous years
People
% satisfaction with FHG as
Employer of Choice
85
87
* based on 31 March 2014 benchmarking thresholds where measured consistently with Housemark definitions
** As detailed in the Business Growth Strategy (7.2) future plans exist to deliver more homes
18
Not reported in this
year
Value for Money Self Assessment 2014-15
DDH Performance 2014/15
Indicator
Upper quartile /
future target *
2014/15
Target
2014/15
Actual
Target
met
2013/14
Target
2013/14
Actual
2012/13
Target
2012/13
Actual
91
91
91.8

87
92.3
87
89.3
Asset Management
% of jobs completed right first time
% of tenants satisfied with the
most recent repair*
Cost per property of Asset
Management (£)**
90
90
86.9

2,444
2,674
2,723

2,539
3,223
27
30
17

10
15
27
27
43.7

Not reported in previous years
Not reported in this
year
Business Growth
New homes developed***
26
26
Neighbourhoods
Average time to re-let properties
(days)****
Previous years’ reporting was based on the
CORE definition (i.e. re-let taken from major
works completion to re-let).
Performance for 2014/15 reflects the full
void period.
22
13
24
23
91.8
85
91.8

91.1
87.7
91.1
87.6
% of sheltered units occupied
95
95
99.1

95
99.1
95
97.8
% of tenants in sheltered schemes
satisfied with the overall service
provided
90
90
93.6

90
87
90
93.1
1.58
2
1.64

2
1.4
1.5
1.3
0
0
0

91.8
85
94.6

<5
<5
10

85
85
85.4

% of tenants satisfied with their
neighbourhood as a place to live
Independent Living
Financial Health and Business Assurance
Current rent arrears as % of rent
due
Number of service areas achieving
high cost and low performance,
based on annual Housemark
benchmarking activity
Not reported in previous years
Customer Access and Insight
% of tenants satisfied with overall
service
Number of complaints escalated to
stage 3*****
85
83
85
88
Not reported in previous years
People
% satisfaction with FHG as
Employer of Choice
85
86
Not reported in this
year
*
based on 31 March 2014 benchmarking thresholds where measured consistently with Housemark definitions
**
***
As detailed in the Asset Management Strategy (7.1) whilst satisfaction with repairs are outside of target future plans exist to
address this. As a result of the major improvement programme, whilst the cost per property is higher than median this level of
As
detailed in
theset
Business
Growth Strategy (7.2) future plans exist to deliver more homes
expenditure
was
intentionally.
****
As detailed in the Neighbourhoods Strategy (7.3) future plans exist to improve re-let times
*****
DDH did not meet its complaints escalated to stage 3 target however, none of these were escalated to the Ombudsman
19
Value for Money Self Assessment 2014-15
9. Conclusion
From this self assessment the Board draws the following key conclusions:
1.
The Group complies fully with the VFM Standard.
2.
VFM is embedded in decision making and the culture and organisation of the
Group and demonstrates a sustained improvement trend with future plans made to
improve VFM further.
3.
Return on assets: Comprehensive information on asset returns, including financial
and social returns, is reviewed to support informed investment decisions.
4.
Performance management and scrutiny function: The Group’s functions are
effective at driving and delivering improved VFM and performance. The Board
recognise that not all the VFM targets have been met and corrective actions, as
detailed in this self assessment, have been put in place to address these issues.
Overall, most high performance standards set for 2014/15 have been achieved.
These include:

Detailed benchmarking against comparative organisations highlighted that the
Group continues to deliver upper quartile performance across numerous areas;

Benchmarking has also highlighted that costs are either at or below median levels
and where costs exceed median, they are directly linked to key aims within the
Corporate Plan or have been targeted for future cost reduction;

Upper decile arrears performance within the Group;

£4.5m gains made during the year enabling better utilisation of loans and
supporting future investments, including new homes;

The vast majority of customers are satisfied with the Group’s services, 94.6% in
DDH and 95.3% in FHL, against the Group’s 85% target;

No service areas delivering low performance at high cost; and

Social and environmental investment in local areas.
5.
The Government’s Summer Budget 2015 introduced significant challenges for the
sector. The Board has responded to these challenges and accelerated planned
efficiency projects, such as the ‘How We Work’ project. The Board has set an initial
£600k efficiency target which it is confident of achieving and is seeking further
efficiencies to be obtained from a detailed assessment of the Group’s cost base.
These targets will be incorporated into next years VFM self assessment.
6.
VFM remains an ongoing process across the Group. Efficiency targets for future
years exist and are being further enhanced to meet the evolving challenges that the
Group and the sector as a whole now face. These targets will enable continued upper
quartile performance across the business, enhance the use of the Group’s asset base
and deliver more homes.
20