VALUE FOR MONEY STRATEGY 2014-17
Date Created:
20 NOVEMBER 2014
Review Period:
3 YEARS
Previous Review:
6 OCTOBER 2011
Next Review Due:
NOVEMBER 2017
EIA Screening:
Review By:
FINANCE DIRECTOR
Responsible Director:
SENIOR MANAGEMENT TEAM
Approved By:
BOARD
Associated documents:
Asset Management Strategy
Customer Service Strategy
Property Development Strategy
Standing Orders, Authorisations and Financial Regulations
Sustainability Strategy
Treasury Management Strategy
Tenant Involvement Strategy
VALUE FOR MONEY STRATEGY
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YORK HOUSING ASSOCIATION
VALUE FOR MONEY STRATEGY 2014-17
INTRODUCTION
The mission of York Housing Association (YHA) is to be an excellent landlord,
providing high quality housing and support services, making a positive contribution in
the communities with which it works.
YHA’s vision is to be recognised by customers and partners as being the
organisation to turn to as the best, the most efficient and effective provider of
housing and support services in the local area.
DEFINITION
YHA’s definition of value for money is rooted in its mission and vision.
In order to achieve the mission and vision as much value as possible must be
produced for the money and resources available to YHA, and YHA’s objectives must
be delivered in the most cost-effective way possible.
The value YHA produces is directly related to its strategic objectives, laid out in the
2014-19 Corporate Plan. These are:
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To remain a strong and viable provider of excellent homes and services to our
existing and future customers
To grow the business and develop the organisation
To be an excellent service provider to all our customers
To be proactive in exploring strategic partnerships
For YHA, therefore, value for money is about achieving the highest levels of
excellence possible, being the best partner possible, providing the most new
properties possible and supporting as many customers as possible with the
resources we have. YHA will do this mindful of the legitimate and sometimes
competing demands of its key stakeholders, customers, local partner organisations,
service commissioners, funders and the taxpayer.
The Value For Money Strategy cannot be considered in isolation. As well as being a
key strategy in delivering the Corporate Plan, it is also inextricably linked to other
strategies:
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Asset Management Strategy
Customer Service Strategy
Property Development Strategy
Standing Orders, Authorisations and Financial Regulations
Sustainability Strategy
Treasury Management Strategy
Tenant Involvement Strategy
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AIMS AND OBJECTIVES
The specific aims and objectives of YHA’s Value for Money Strategy are to:
1. VfM Culture
Aim - Promote and embed a culture of value for money and continuous
improvement, integrating value for money principles into all the day to day
activities of the organisation.
Objective - Ensure YHA’s budget setting and management processes are robust
and challenging in terms of resource allocation decisions.
2. Financial Capacity
Aim - Maximise the resources available to meet future customer demand.
Objective - Use YHA’s capacity for the delivery of further social housing. By
utilising YHA’s borrowing capacity, increasing gearing and making use of
unencumbered assets, YHA will aim to maximise delivery of new homes.
3. Assets
Aim - Maximise the resources available to meet current customer requirements.
Objective - Actively manage YHA’s assets. Bring together YHA’s understanding
of its stock condition and associated investment needs; maintenance costs;
demand and the communities and markets it operates in; and return on assets in
financial, social and environmental terms. Use this understanding to inform
intelligent asset management that aims to improve returns and intelligent
business decisions around YHA’s housing stock (i.e. hold, invest, dispose,
convert), investing only where returns (financial, social and environmental) are
clear.
4. Tenant Satisfaction
Aim - Wherever possible target resources to priorities that have been identified by
customers and ensure improvement in services where customer feedback
indicates concern with quality, cost or performance.
Objective - Maintain and improve upon YHA’s current performance on tenant
satisfaction (median or upper quartile performance), particularly focussing on:
 Overall service provided by the landlord
 Repairs and maintenance
 Quality of the home
 Neighbourhood
 Value for money of rent and service charges
5. Performance
Aim – To perform at the sector benchmarks, or better for all areas of operation.
Objectives - Ensure YHA’s operational activities focus on income, and hence
resource maximisation. Monitor YHA’s performance over time against the
national benchmarks for smaller associations (through membership of the SPBM
benchmarking club). Achieve targets for:
 Current and former tenant arrears and bad debts
 Voids
 ASB
 Repairs and maintenance
 HR
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6. Procurement
Aim - Ensure that value for money drives the organisation’s procurement
processes.
Objective - Evidence that YHA’s procurement processes, as laid down in YHA’s
Procurement Strategy, continue to drive value from YHA’s purchasing activities.
7. Operating Costs
Aim – Deliver value for money by operating at costs comparable with sector
peers.
Objective - Ensure YHA’s cost base is not significantly misaligned with the rest of
the sector, by working towards the Homes and Communities Agency’s Global
Accounts performance, in relation to percentage of turnover allocated to:
 Management costs per unit
 Maintenance costs per unit
 Investment per unit
 Operating surplus
8. VfM Self Assessment
Aim - Meet regulatory requirements.
Objective - Produce a robust Value for Money Self Assessment, published in
YHA’s annual financial statements, and on YHA’s website.
DELIVERY
YHA’s corporate planning processes are designed to ensure that resources are
targeted effectively to ensure that value for money is maximised. Thus the
Association aims to be as efficient and effective as possible at doing the things which
achieve its objectives.
The delivery of value for money is achieved through the Association’s Business
Planning process, which encapsulates resource allocation decisions; its
Performance Management Framework, which sets out the various roles of the
Board, senior management team, managers and staff, and customers and tenants in
planning, delivering and evaluating performance; and benchmarking and internal
audit reviews, which provide independent assurance of delivery.
An action plan setting out the specific actions that will be undertaken over the life of
this strategy is attached at appendix 1.
ASSURANCE
The Board gains assurance of the Association’s approach to value for money
through the Association’s Performance Management Framework, business planning
processes, benchmarking its performance, internal audit reviews and tenant scrutiny.
Performance on value for money will be addressed in the programme of annual
narrative reports as a specific element of the review of each activity/service/area of
operation that the annual narrative report covers.
REGULATION
As required under the HCA’s regulatory regime a Value For Money Self-Assessment
is produced annually. This will:
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Summarise the Value for Money Strategy
Provide comparative information on a range of key performance indicators
Detail value for money achievements for the preceding year in terms of:
1. Assets
2. Operations
3. Procurement
4. Treasury Management
5. Financial Surplus
Detail future plans and priorities for delivery of further value for money
improvements in the coming year
The self-assessment is included in the Association’s statutory accounts, and is made
easily accessible to stakeholders, in particular through publication on the
Association’s website.
CONCLUSION
This Value for Money Strategy sets out the Associations commitment to value for
money for the period 2014-2017 and clarifies the specific actions and targets that we
will be working towards during that period.
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APPENDIX 1
VALUE FOR MONEY ACTION PLAN
VfM Objectives 2014-2017 Strategy Goal
Actions
Milestones
3. Assets
Review YHA’s Asset Management
Strategy. This will bring together
YHA’s understanding of its stock
condition and associated
investment needs; maintenance
costs; demand and the
communities and markets it
operates in; and return on assets
in financial, social and
environmental terms. This
understanding will then inform
intelligent asset management that
aims to improve returns and
intelligent business decisions
around the association’s housing
stock (i.e. hold, invest, dispose,
convert), investing only where
returns (financial, social and
environmental) are clear.
Year 1
D&PD
Identify, measure and evidence the
social value of YHA’s activities.
5. Performance
Identify those assets that
underperform in terms of financial,
social and environmental returns.
Undertake appropriate hold/ invest
/dispose/convert actions.
Undertake option appraisals on
assets identified as “risk – red”
Complete approved disposals
Year 2
Complete approved remodelling of
shared housing.
Begin option appraisals on assets
identified as “appraisal – amber”
Year 3
Complete option appraisals on
assets identified as “appraisal –
amber”
Create a robust energy database
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Responsible
VfM Objectives 2014-2017 Strategy Goal
Actions
Milestones
Responsible
4. Tenant
Satisfaction
Monitor satisfaction ratings, taking
action where performance falls
below median or upper quartile
performance.
Year 2
Undertake a tenant satisfaction
survey and develop a response
plan to any issues arising.
OD
Continue to act on the conclusions
of the Board’s review of YHA’s
capacity for delivery of further
social housing; by utilising YHA’s
borrowing capacity, increasing
gearing and making use of
unencumbered assets, to provide
more new homes, providing 190
properties by the end of the 20142019 Corporate Plan.
Year 1
38 new properties
20% operating margin
FD
5. Performance
2. Financial
Capacity
7. Operating
Costs
Undertake surveys of tenant
satisfaction, to ensure identification
of areas of customer concern, for
the purposes of this strategy
focussing on:
Overall service provided by the
landlord
Repairs and maintenance
Quality of the home
Neighbourhood
Value for money of rent and
service charges
Deliver the five-year development
programme identified in the 20142019 5 year Business Plan.
Benchmark YHA’s performance
over time and against the HCA’s
global to ensure that YHA’s cost
base is not significantly misaligned
with the rest of the sector and
hence supports the delivery of
value for money.
Year 2
38 new properties
22% operating margin
Year 3
38 new properties
23% operating margin
Reduce operating costs as a
percentage of turnover, reaching
27% by the end of the 2014-2019
Corporate Plan
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VfM Objectives 2014-2017 Strategy Goal
1. VfM Culture
Ensure YHA’s budget setting
process is robust and challenging
in terms of resource allocation
decisions.
Actions
Milestones
Responsible
Further embed value for money
through the development of a new
approach to budget setting with
greater Board involvement through
a budget working group
Year 1
Board Budget Working Group
contributes to, reviews and
approves year 1 budget reviews
and year 2 budget. Establishes
future budget setting process.
FD
Reintroduce a log of value for
money gains achieved.
5. Performance
6. Procurement
Ensure that YHA’s operational
activities focus on income (and
hence resource) maximisation.
Ensure that YHA’s Procurement
Strategy delivers value for money
gains.
Improve performance on voids,
arrears and bad debts, to ensure
YHA maximises the income
available to it. The Board have set
stretching targets in these areas
and will monitor performance
closely.
Reintroduce a log of value for
money gains achieved.
Undertake a review of the
Association’s procurement
systems and activities.
Achieve joint procurement across
departmental budget heads, e.g.
responsive and planned
maintenance.
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Reintroduce value for money log
and use to support VFM SelfAssessment
Year 1
Current tenant arrears 2%
Former tenant arrears 1.5%
Bad debts 0.8%
Voids 2%
Years 2 and 3
Board to set appropriate and
stretching targets
Year 1
Joint procurement exercise
completed and reduced costs
achieved.
OD
CE
OD / D&PD
Year 2
Engage consultants to review
processes for payment of supplier
invoices and improve systems
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VfM Objectives 2014-2017 Strategy Goal
5. Performance
8. VfM SelfAssessment
Benchmark YHA’s performance
over time and against the national
benchmark for smaller
association’s in relation to:
Operating cost per unit
Management cost per unit
Investment per unit
Produce a robust Value For Money
Self-Assessment
VALUE FOR MONEY STRATEGY
Actions
Milestones
Responsible
Clarify the Association’s
maintenance costs in comparison
to the smaller housing
associations’ benchmark and
incorporate findings into budget
setting for 2015/2016
Year 1
Participate in SPBM maintenance
cost benchmarking exercise
OD / FD
Act on recommendations of
Internal Audit review of Value for
Money systems and procedures
10
Year 2
Incorporate findings into 15/16
budget
Years 1 and 2
Implement audit recommendations
to strengthen VfM Strategy and
approach.
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FD